Gold turns flat to $1225 as USD stages a minor recovery

Gold turned flat to currently trade around $1225, nearly unchanged from Wednesday's close, as USD bulls pushed the greenback higher after an initial downward spike on US economic releases.

Immediately after the release of US durable goods order and weekly jobless claims data, the yellow metal spiked back above $1230 just to erase all of its Thursday's gains. The precious metal on Wednesday witnessed a sharp short-covering bounce from $1218, which extended till $1234 touched during Asian session on Thursday.

Since the beginning of this month, the yellow metal has remained under pressure on renewed buying interest in the greenback. Adding to the positive sentiment surrounding the USD, hawkish Fed minutes release in the previous week, further spiraled the fall in the precious metal.

From technical perspective, the commodity is rebounding from near-term oversold conditions, led only by short-covering and hence, seems unlikely to sustain its pull-back strength at higher level. Furthermore, with increasing prospects of a June Fed rate-hike, the yellow metal remains vulnerable to further downside in the near-term, which would be confirmed on a convincing break below 100-day SMA strong support near $1217-15 region.

Technical levels to watch

From current levels, 100-day SMA ($1215 region) remains immediate support to defend. Failure to hold this immediate support should drag the pair immediately below $1200 handle towards Feb. lows support near $1190 level. Moreover, below 100-day SMA, gold is likely to turn vulnerable to extend its slide towards testing the very important 200-day SMA support near $1160 region.

Meanwhile on the upside, the commodity need to build on to its strength above $1235 resistance and the momentum could assist the metal to move back towards 50-day SMA support break-point turned immediate strong resistance near $1247-50 region.