Gold building on yesterday’s sharp slide, headed for first weekly decline since late Jan.

Gold extended its reversal move from the very important 200-day SMA and edged lower on Friday, dropping to the lowest level since Feb. 22.

Currently trading around $1228 region, the precious metal added on to previous session's sharp downslide of over 1% and is now set for its weekly decline since late Jan. on growing expectations for an eventual Fed rate-hike action in March. 

Spot gold recorded its biggest one-day drop for 2017 on Thursday and ended at a more than two-week lows as persistent greenback buying interest, lifting the key US Dollar Index to its highest level since Jan. A stronger greenback tends to weigh on dollar-denominated commodities, including gold.

In addition to this, recent hawkish comments from various FOMC officials supported the belief that the central bank is more likely to go ahead and raise benchmark interest rates at its monetary policy meeting on March 14-15, which further drove flows away from the non-yielding yellow metal.

Fed: Remarkable turnaround in March rate hike expectations - ANZ

Looking ahead, today's speech from the Fed Chair Janet Yellen, alongside other policymakers, would be looked upon to reinforce the market expectations and hence, should keep a lid on any meaningful recovery for the metal. 

Technical levels to watch

A follow through selling pressure below $1226-25 immediate support is likely to accelerate the slide towards $1222-21 intermediate support ahead of 100-day SMA support near $1212 region. 

On the upside, any recovery attempts might now confront resistance near $1235 level and is followed by a strong hurdle near $1240-41 area. Only a convincing strength back above $1240 resistance would negate any near-term bearish bias and lift the commodity back towards $1250 resistance.