Gold consolidating near 3-week lows, just above $1250 level

Gold oscillated in a narrow trading band above $1250 level and consolidated its recent losses to three-week lows.

The precious metal remained under some selling pressure for the second consecutive session on Thursday and extended its sharp reversal move from weekly high level of $1281. Persistent US Dollar buying interest, against the backdrop of hawkish Fed decision and Thursday's better-than-expected US economic data, drove spot prices to the lowest level since May 24. 

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The selling pressure seems to have receded on the last trading day of the week amid subdued greenback price-action, which was seen lending some support the dollar-denominated commodity. 

However, the prevalent positive trading sentiment around equity markets dented demand for traditional safe-haven assets and failed to help the commodity to build on its tepid recovery move from three week lows. Moreover, a follow through up-tick in the US Treasury bond yields also seems to collaborate towards keeping a lid on the non-yielding metal's rebound.

Currently placed just below $1255 level, traders look forward to the US economic data - US housing market data and the preliminary release of UoM Consumer Sentiment Index for June, for some fresh short-term trading impetus.

Technical levels to watch

On a sustained recovery beyond $1255 level, a bout of short-covering is likely to lift the commodity back towards $1259-61 horizontal resistance ahead of $1265 important hurdle. Conversely, weakness below $1250 level is likely to get extended towards 100-day SMA support near $1245 region before the commodity eventually drops to test the very important 200-day SMA support near $1240-39 region.