• USD firmness continues to weigh on the commodity. • Fed rate hike prospects add to the downward pressure. • Investors keenly wait for the second round of Powell’s testimony.
After yesterday's brief pause, gold came under some renewed selling pressure on Thursday and dropped to three-week lows in the last hour.
The US Dollar remained underpinned by the Fed Chair Jerome Powell's upbeat comments on the US economy and was seen denting demand for dollar-denominated commodities - like gold.
Adding to this, growing fears, that the Fed might opt for a faster monetary policy tightening cycle, further contributed toward weakening sentiment around the non-yielding yellow metal.
Meanwhile, weakness in equity markets, which tends to underpin demand for traditional safe-haven assets, extended some support and helped the precious metal to hold its neck above February swing lows.
Investors now keenly await the second round of Powell’s testimony before the Senate banking committee, which should help determine the commodity's next leg of directional move.
In the meantime, a flurry of US economic releases might also influence the USD price dynamics and provide some short-term trading impetus later during the early NA session.
Technical levels to watch
Weakness below $1311-10 area now seems to drag the metal below $1307 level (Feb. low) towards testing 100-day SMA support near the key $1300 psychological mark. On the upside, the $1318-20 region now seems to have emerged as an immediate resistance, above which a bout of short-covering could lift the commodity further towards $1331-33 supply zone.
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