Gold extends weakness further below 50-DMA

Gold extended Tuesday's break-down momentum from 3-day old trading range and maintained its bearish bias below 50-day SMA for the second consecutive session.

Currently trading at a 5-day low level of $1324, the yellow metal is weighed down by a broadly stronger greenback. Tuesday's US consumer confidence data and hawkish comments from Federal Reserve Vice Chairman Stanley Fischer provided a boost to the US Dollar, which tends dent demand for dollar-denominated commodities, and provided the required momentum for gold prices to break through the recent consolidation phase.

Carol Harmer, Founder at charmertradingacademy.com, notes, "Gold broke below the 1333/31 area yesterday but is clinging onto the 1324 area....Now if we start to break below 1321 we would assume we are trading lower and looking once more at the 1310/04 support evident from the weekly charts....Maybe Gold wasn't ready to break the 1344 area just yet...given we have been overbought.....we may well still be oscillating within this range we are seeing.....since really June.....so weeklies remain positive.....we buy weakness on the premise that we break the 1344 resistance at some stage..."

Next in focus would be the release of monthly US durable goods orders and the Fed Chair Janet Yellen's testimony later during NY trading session, which will be looked upon to grab short-term trading opportunities.

Technical levels to watch

On a sustained weakness below $1322-20 immediate support, the metal seems to aim towards testing 100-day SMA support near $1310 region. Meanwhile on the upside, recovery momentum above session high resistance near $1327-28 level might now be capped at 50-day SMA support break turned strong resistance.