Gold trading with mild bearish bias below $1240 level ahead of jobless claims

Gold traded with mild bearish bias through European session on Thursday and touched a fresh session low near $1237 region. 

The downslide, however, was limited and could be attributed to some profit-taking amid modest US Dollar strength, which tends to weigh on dollar-denominated commodities - like gold. In addition to this, a fresh leg of up-move in the US Treasury bond yields, across all maturities, also collaborated to the metal's minor retracement on Thursday. A jump in the US Treasury yields tends to drive flows away from the non-yielding yellow metal.

Meanwhile, positive trading sentiment around European equity market, pointing to improvement in the investors’ risk appetite, further dented demand for traditional safe-haven assets and prompting traders to take some profits off the table following the metal’s recent up-surge to nearly three month peaks. 

Next on tap would be the release of weekly jobless claims data from the US, which migh provide some short-term trading impetus during early NA session. 

Technical levels to watch

Immediate downside support is pegged near $1235 level below which the commodity seems to head towards $1229-27 intermediate support, en-route 100-day SMA strong support around $1222 region. On the flip side, momentum above $1240 level might continue to face resistance at multi-month peaks near $1245 level above which the metal is likely to extend its near-term upward trajectory, initially towards $1250 horizontal resistance and eventually towards the very important 200-day SMA hurdle near $1263-65 region.