Gold plummets to fresh multi-week lows near $1250 region

Gold extended previous session's sharp reversal move from $1280 region and tumbled to fresh three week lows during early NA session.

The precious metal's latest leg of fall to $1252-51 region could be attributed to broad based US Dollar strength. Against the backdrop of Wednesday's hawkish Fed, better-than-expected weekly jobless claims and couple of upbeat regional manufacturing data - Philly Fed and Empire state manufacturing index, provided an additional boost to the greenback's strong up-move and was seen weighing on dollar-denominated commodities - like gold. 

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Moreover, reviving hopes for additional Fed rate-hike action in 2017, reinforce by a sharp up-surge in the US treasury bond yields, further collaborated to driving flows aways from the non-yielding yellow metal. 

Meanwhile, market seems to have largely ignored a fresh wave of global risk aversion trade, which usually tends to lend support to traditional safe-haven assets, including gold, with hawkish Fed acting as an exclusive driver of the metal's slump to the lowest level since May 24.

Technical levels to watch

A follow through weakness below $1250 level is likely to get extended further towards 100-day SMA support near $1245 region before the metal eventually drops to the very important 200-day SMA support near $1240 region.

On the flip side, any recovery move now seems to confront immediate resistance near $1255 level, above which a bout of short-covering could lift the commodity further towards $1261-62 resistance area.