Gold drifts away from 7-week highs, focus on ADP report

Gold edged lower on Wednesday as investors looked to take some profits off the table following yesterday's upswing to fresh seven-week highs. 

The precious metal swung from session low near $1262 region and jumped to the highest level since June 14 on downbeat US economic data, which dampened prospects of any additional Fed rate hike action in 2017 and helped shrug off an uptick in the US Dollar. 

Against the backdrop of continued US political uncertainty, the recent USD slump has been one of the key factors benefitting the dollar-denominated yellow metal. Hence, it would now be interesting to see if the pull back is utilized as a buying opportunity amid lack of any strong follow through greenback buying interest. 

Today's highlight from the US economic docket would be the ADP report on private sector employment, which would influence market expectations about Friday's official NFP print and should help traders to grab some short-term trading opportunities. 

   •  US jobs: Conviction that we are at full employment remains relatively high – Goldman Sachs

Technical levels to watch

Currently trading around $1266-67 region, bulls might continue to try and defend $1262-60 immediate support, below which the metal could correct further towards the very important 200-day SMA support near the $1251-52 region. 

On the flip side, sustained up-move back above $1270 level now seems to lift the commodity even beyond $1274 level (yesterday's high) towards its next major hurdle near $1279-80 horizontal zone.