Gold slide to 3-week lows, back below 100-DMA

   •  Drops to 3-week lows on surging US bond yields
   •  Remains vulnerable on Fed chair speculations

Gold remained under some selling pressure on Wednesday and is currently placed at three-week lows, below 100-day SMA.

Speculations that the next Fed Chair could be more hawkish remained supportive of a strong follow-through upsurge in the US Treasury bond yields and weighed on the non-yielding precious metal. According to some news report, Republican senators were leaning towards John Taylor, who is seen to prefer higher interest rates in the US. 

Safe-haven demand helps limit further downside

Meanwhile, a subdued action around the US Dollar, coupled with prevalent cautious sentiment around equity markets helped limit deeper losses, at least for the time being. A weaker greenback tends to lend support to dollar-denominated commodities - like gold while deteriorating risk appetite boosts demand for traditional safe-haven assets. 

Against the backdrop of optimism over the US President Donald Trump's proposed tax reforms, a follow-through weakness, led by persistent USD buying interest, now seems a distinct possibility.

In the meantime, today's durable goods orders data from the US would be looked upon for some short-term trading impetus ahead of the highly anticipated ECB monetary policy decision on Thursday.

Technical levels to watch

A follow-through weakness could get extended towards $1268 level, below which the commodity seems vulnerable to break below $1260 support and head towards $1255-54 zone.

On the upside, a sustained recovery above the $1275-76 region (100-DMA) might trigger a short-covering bounce towards $1281 supply zone en-route $1290 strong hurdle.