Gold turns lower to $1250, focus remains on FOMC minutes

Gold reversed early tepid recovery gains to $1258 level and turned lower to currently trade with negative bias around $1250 region. 

The greenback extended its near-term bullish momentum and is seen weighing on dollar-denominated commodities - like gold. Moreover, rising expectations that the Fed would eventually go ahead and raise interest rates by the end of this year is further denting demand for the non-yielding precious metal.

However, the prevalent cautious sentiment around European equity markets is extending some support to the yellow metal's safe-haven appeal and has limited any sharp downslide.

Bullion traders remain focused on today's release of FOMC meeting minutes, which if reaffirms market expectations over the timing of next Fed rate-hike action would be highly supportive for the US Dollar and would pave way for continuation of the metal's break-down momentum below the very important 200-day SMA.

Technical levels to watch

On a sustained weakness below $1250, the metal seems vulnerable to head back towards last week's swing low support near $1241-40 region below which a fresh leg of weakening trend is likely to drag the commodity further towards $1235 support area.

Meanwhile on the upside, session high level near $1257-58 region now seems to act as immediate resistance, which if cleared is likely to boost the commodity back towards 200-day SMA resistance near $1262 region.