Gold extends yesterday’s break-down momentum, hits fresh six-week lows

Gold extended previous session's break-down momentum below the very important 200-day SMA and is now hanging around 1-1/2 month lows near $1235-33 region.

Wednesday's perceived hawkish Fed policy statement, leaving doors open for a June rate-hike action, triggered a fresh leg of up-move in the US treasury bond yields and prompted investors to move their investments out of the non-yielding yellow metal. 

Ahead of the Fed announcement, slightly better-than-expected ADP report and upbeat ISM non-manufacturing PMI supported the US Dollar's recovery move and was seen weighing on dollar-denominated commodities - like gold. 

Meanwhile, receding geopolitical tensions has also failed to lend any support to the precious metal's safe-haven appeal, with the US bond yields and USD price-dynamics acting as key determinants of the commodity's near-term trajectory. 

Investors now look forward to Friday's keenly watched non-farm payroll figures for fresh impetus. Against the backdrop of slowing private-sector employment, as shown by Wednesday's ADP report, a slight miss in the headline NFP print is unlikely to provide any immediate respite for the metal.

Technical levels to watch

Currently trading around $1235 level, a follow through weakness below $1230 level could get extended towards 100-day SMA support near $1220 region, with some intermediate support around $1224 level.

On the upside, any recovery beyond $1241 (session top) is likely to confront resistance near $1245 level and further recovery beyond this immediate resistance might now be capped at the 200-day SMA support break, now turned resistance, near $1251-52 region.