Gold halts 3-day rally, drops ahead of FOMC minutes

By FXStreet Gold faced rejection at $ 1280 mark and drifted lower thereon, as risk conditions appear to improve amid recovery in the Asian markets backed by solid Japanese GDP data.

Gold eyes 10-DMA support at $ 1274.20

Currently, gold trades -0.19% lower at 1276.90, hovering close to session lows reached at 1276.35 last minutes. The bullion is seen reversing a part of previous gains as the bears regained control amid a solid bounce in risk sentiment, mainly driven by stronger-than expected Japanese Q1 GDP figures.

Moreover, extension of the rally in the US dollar against its major peers on the back of upbeat US CPI figures, also weighs on the bullion. Meanwhile, the US dollar index trades -0.13% higher at fresh session tops of 94.68, now heading towards 95 handle.

Further, the weakness in the metal can be attributed to a profit-taking slide, as markets prefer to take profits off the table ahead of the FOMC minutes, which may cause extreme moves in the gold prices.

Gold Technical Levels

The metal has an immediate resistance at 1287/1290 (May 9 High/ round number) and 1300 (psychological levels). Meanwhile, the support stands at 1274.20 (10-DMA) below which doors could open for 1268.40 (20-DMA).
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Source:: FX Street