Gold slides further, heading towards $1250

Gold extended its slide on Thursday to $1252 after the yellow metal broke down from its recent trading on Wednesday following the release of Fed minutes.

Minutes from the Fed’s April policy meeting released on Wednesday revealed that policymakers still considered an interest-rate increase in June appropriate if the incoming data continues to point towards stable economic recovery. Hawkish Fed minutes boosted demand for the greenback, which usually hurts demand for dollar-denominated commodities, like gold.

Wednesday's weakness back below 20-day SMA support confirmed that the precious metal might have already peaked in the short-term near $1300 handle. A follow through break below $1250 level (50-day SMA) would further confirm the break-down, thus opening room for further near-term corrective move for the yellow metal.

Technical levels to watch

On a sustained weakness below 50-day SMA support ($1250), the metal seems to extend its near-term corrective move towards $1232 support with $1245 acting as intermediate support.

Meanwhile on the upside, $1258-60 near day's peak now seems to act as immediate resistance and even if the metal manages to climb above day's peak any further up-move might now be restricted by 20-day SMA support break-point turned strong resistance near $1267.