Gold bounces off one-week lows, still weaker around $1260 region

Gold came under some fresh selling pressure on Thursday and drifted further away from seven-week highs hit earlier this week, albeit has managed to bounce off session lows.

Currently trading around the $1261-62 region, the precious metal took a breather from its recent rally and traded with a negative bias for the fourth consecutive session. The market seems to have digested yesterday's weaker US private sector employment details and persistent US Dollar weakness. A soft greenback is typically supportive of dollar-denominated commodities - like gold. 

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Meanwhile, mixed comments on the Fed's near-term monetary policy outlook from St. Louis Fed President James Bullard and Cleveland Fed President Loretta Mester firmed market expectations that the Fed could announce to trim its bond holding at September meeting, which was eventually seen weighing on the non-yielding yellow metal. 

Even growing geopolitical tensions, with the US President Donald Trump imposing new sanctions against Russia and a travel ban to N. Korea, did little to extend any support to traditional safe-haven assets, with repositioning trade, ahead of Friday's NFP print, now acting as an exclusive driver of the commodity's profit taking slide to one week lows. 

Technical levels to watch

On a sustained weakness back below $1260 level could accelerate the fall towards 100-day SMA support near $1251 region ahead of $1245-44 horizontal support. On the flip side, $1264-65 region now seems to act as an immediate resistance, which if cleared could lift the metal back towards $1270 hurdle en-route multi-week highs resistance near the $1274-75 area.