Gold tumbles to 5-week low on March rate hike bets

Gold stretched its recent losing streak and weakened to hit a five-week low during early European session on Wednesday.

Increasing likelihood that the Federal Reserve will raise interest-rates at its upcoming monetary policy meeting on March 14-15 prolonged the ongoing bullish momentum in the US treasury bond yield and continues to drive flows away from the non-yielding yellow metal.

Rising bond yields also underpinned the greenback demand, with the key US Dollar Index climbing back to the 102.00 handle, and eventually dented demand for dollar-denominated commodities - like Gold. 

Meanwhile, a slight improvement in market risk-sentiment, with major European equity indices moving mildly into positive territory, was seen weighing on the precious metal’s safe-haven appeal and further collaborated to Wednesday’s downslide. 

Ahead of Friday’s official jobs data (NFP), today’s US economic docket features the release of ADP report on private sector employment and would be looked upon for fresh trading impetus during early NA session.

Technical levels to watch

A follow through selling pressure below $1210 level would increase the metal's vulnerability to break below the $1200 psychological mark and head towards testing $1196-95 horizontal support. 

On the flip side, any recovery back above $1215 level now seems to confront strong resistance near $1221-22 region, above which a fresh bout of short-covering might lift the commodity back towards $$1235 resistance area.