Gold struggling near 3-week lows amid rising Fed rate hike bets

Gold resumed its reversal move from the very important 200-day SMA hurdle and dropped to nearly 3-week lows on Tuesday.

Currently trading around $1224 region, off session low touched in the past hour, a fresh wave of up-move in the US treasury bond yields, against the backdrop of an eventual Fed rate-hike action in March, was seen driving flows away from the non-yielding precious metal. Moreover, rising bond yields continue to underpin the US Dollar demand and also collaborated to the metal's downslide. A stronger greenback tends to weigh on dollar-denominated commodities, including gold.

Meanwhile, a mildly positive opening trading sentiment around European equity markets further dented the metal's safe-haven demand and failed to lend any immediate support. 

Investors' attention will remain glued to the release of keenly watched monthly jobs data from the US (NFP), which would drive Fed rate-hike expectations and provide fresh impetus for the commodity's next leg of directional move.

Technical levels to watch

A follow through selling pressure would turn the metal vulnerable to extend the downslide further towards testing 100-day SMA support near $1212 region, with some intermediate support near $1219-17 area. 

On the upside, momentum above session peak level of $1227, leading to a subsequent strength above $1230 resistance, might continue to confront strong resistance near $1235-35 region. Only a decisive break through $1235 hurdle would negate near-term bearish bias and lift the commodity back towards $1250 strong resistance.