Gold accelerates its decline to a fresh multi-week low of $1238

As the US Dollar extended its bid-tone, Gold continues to slide lower, maintaining its high degree of inverse correlation with the greenback, and has now dropped below $1240 level on global risk-on sentiment.

At the time of writing, spot gold traded at $1238, virtually erasing majority of its gains recorded during the last week of April. The precious metal came under renewed selling after the release of minutes from the US Federal Reserve meeting held in April that sparked a broad based rally for the greenback, thus hurting demand for dollar-denominated commodities, like gold.

Moreover, risk-on rally across European equity markets is also keeping gold bulls under check. Even from technical perspective, a follow through selling pressure below an important support near $1250 clearly points to continuation of the near-term downward trajectory.

Technical levels to watch

From current levels, the commodity seems unlikely to find support any support ahead of $1230 level, which if broken might continue dragging it lower towards testing the next major support near $1215 level.

Meanwhile, any attempts of recovery might now confront immediate resistance near $1243-44 region and even if the metal manages to clear this immediate hurdle, further up-move now seems to be capped at $1250 support break-point now turned strong resistance.