Gold corrects for second straight session

Gold extended its corrective slide for the second straight session and moved farther from Tuesday's two-month peak near $1220 level.

Currently hovering around $1205 region, the prevalent risk-on mood, as depicted by positive sentiment surrounding equity markets, was seen denting the precious metal's safe-haven appeal. 

This coupled with mild greenback strength, with the key US Dollar Index holding its neck above 100.00 psychological mark, is further weighing on dollar-denominated commodities - like gold. 

Moreover, expectations of additional rate-hike actions by the US Federal Reserve and a fresh wave of up-move in the US treasury bond yields is also driving flows away from the non-yielding yellow metal.

This week’s important US macro releases, GDP print and durable goods order on Friday, would help investors gauge the strength of the US economic growth and provide fresh impetus for the metal’s near-term trajectory. In the meantime, the commodity remains at the mercy of USD price dynamics and broader market risk sentiment.

Technical levels to watch

A follow through retracement below $1200 mark is likely to accelerate the slide towards $1195 support below which the metal might turn vulnerable to head back towards testing 50-day SMA support near $1180 region.

On the upside, $1208-10 area now becomes immediate resistance and is followed by strong horizontal barrier, which if cleared would open room for resumption of the metal’s near-term upward trajectory further towards its next major hurdle near $1235 region, marking 100-day SMA.