Gold drops to over two-week lows as USD strengthens further

Gold continued losing ground through early NA session and weakened back below 100-day SMA support near the $1275 region. 

Currently placed at more than two-week lows, the precious metal remained under some selling pressure for the second consecutive session and was being weighed down by strengthening US Dollar. 

Against the backdrop of optimism over the US tax reforms, a big win for Japan's ruling coalition left doors open for an ultra-loose monetary policy and provided an additional boost the greenback, which was eventually seen exerting fresh selling pressure around dollar-denominated commodities - like gold

Meanwhile, the prevalent risk-on environment, even at all-time high levels, was also seen driving flows away from traditional safe-haven assets and did little to stall the yellow metal's slide to its lowest level since Oct. 6.

From a technical perspective, the precious metal has failed to build on its recent recovery move back above $1300 mark and a follow through weakness back below 100-day SMA now seems to indicate resumption of its prior depreciating move in the near-term. 

Technical levels to watch

A follow through selling pressure below $1270-67 support area has the potential to drag the commodity back towards monthly lows near $1260 level en-route its next major support near $1255 horizontal level. 

On the upside, recovery back above $1275 level (100-day SMA) might now confront fresh supply near the $1280 region, above which a bout of short-covering could lift the metal back towards $1290 support zone.