Gold continues facing stiff resistance at 200-DMA, weakens ahead of Trump-Xi meeting

Gold failed to extend previous session's post-FOMC minutes sharp bounce back and once again faced rejection at the very important 200-day SMA. 

Spot accelerate the rejection move and dropped to fresh session low near $1250 amid mild improvement in investors' risk appetite, as depicted by recovery in equity markets. Meanwhile, a positive tone surrounding the US Dollar, which picked-up some pace following better-than-expected weekly jobless claims, further weighed on dollar-denominated commodities - like gold. 

Further downslide, however, remained limited in wake of the prevalent cautious environment ahead of the crucial meeting between the US President Donald Trump and Chinese President Xi Jinping, which supported demand for traditional safe-haven assets and helped the precious metal to pare some of its losses to currently trade around the $1252-53 region.

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Meanwhile, markets seemed to have digested Wednesday's perceived hawkish Fed minutes, which supported views for additional Fed rate-hike moves during 2017. Hence, investors focus would remain on Friday's keenly watched NFP data, which would drive Fed rate-hike expectations and eventually be the next big fundamental trigger for the non-yielding yellow metal's near-term trajectory.

Technical levels to watch

Immediate support is pegged near $1250 region, below which the metal is likely to head back towards $1245 intermediate support en-route its next major support near $1235 level. On the upside, $1255 level is likely to act as immediate resistance, but the key hurdle remains at the 200-day SMA near $1260 region. On a sustained break through this important barrier, the metal seems all set to extend the near-term upward trajectory towards its next major resistance near $1275 area.