Gold extends slide for 3rd straight session, drops to weekly low

Gold extended its rejection move from the very important 200-day SMA resistance and pulled-back farther from the 3-1/2 month highs touched on Monday.

Currently trading at multi-day lows, around $1243 level, the precious metal drifted lower for the third consecutive session in wake of hawkish comments from the Federal Reserve officials on Tuesday, which raised market expectations for a March Fed rate-hike action. Growing Fed rate-hike bets lifted the US treasury bond yields and weighed on the non-yielding yellow metal. Rising bond yields also underpinned the US Dollar demand and further dented demand for dollar-denominated commodities - like gold. 

Furthermore, Wednesday's upbeat Chinese manufacturing PMI, easing concerns of economic slowdown in the world's second largest economy, drove flows away from traditional safe-haven assets and also collaborated to the metal's downslide to weekly lows. 

A slew of US macro data on Wednesday would continue to influence hopes of a rate increase and provide fresh impetus for the metal during early NA session.

Technical levels to watch

Immediate support is seen at $1240 level, below which the commodity seems to extend the corrective slide towards $1225 horizontal area with some intermediate support near $1235 level. On the upside, momentum above $1246-47 immediate barrier now seems to confront resistance near $1257 level. Any further up-move might continue to be restricted at the very important 200-day SMA strong hurdle near $1261-62 region.