Gold plummets to fresh session low near $1240 post US GDP

Gold came under some fresh selling pressure on Thursday and dropped to fresh session low near $1241 region following the release of US economic data.

The latest leg of slide over the past hour or so could be attributed to a modest greenback recovery. In fact, the key US Dollar Index has managed to recover the majority of its early lost ground after the final US GDP print came in to show a stronger than initially expected growth of 1.4% for the first quarter of 2017, and is eventually weighing on dollar-denominated commodities - like gold.

Adding to this, today's data also seems to have lifted expectations for additional Fed rate-hike action in 2017 and the same is evident from surging US Treasury bond yields, which further collaborated towards driving flows away from the non-yielding metal and dragged it to session lows near $1240 level. 

With today's slide, the precious metal has now reversed previous two days of tepid recovery gains. Adding to this, the reemergence of selling pressure on every up-move beyond $1250 level clearly seems to suggest that the bearish pressure around the commodity might still be far from over.

Next in focus would be a scheduled speech by St. Louis Fed President James Bullard, which might provide some fresh impetus later during the NY trading session. 

Technical levels to watch

The metal now seems to find immediate support at the very important 200-day SMA near $1235 region, which if broken would turn it vulnerable to extend the bearish slide further towards $1228 horizontal area en-route $1220 important support.

On the flip side, any up-move back above $1244 level might continue to confront resistance near $1250 level and is closely followed by strong supply zone near $1254-55 region.