Gold heads towards 200-DMA amid firmer treasury yields

Gold is seen extending to the downside in Asia, having faced stiff resistance near $ 1270 region, in wake of increased odds of a Fed rate hike this year.

Gold capped by $ 1270

Currently, gold trades -0.27% lower at 1265.80, flirting with daily lows struck at 1265.52 earlier on the day. Gold is seen reverting towards four-month troughs reached just ahead of 200-DMA, now located at 1259.50, as the US treasury yields remain on the rise after strong US services and manufacturing data reinforced market expectations that Fed is on track to raise rate this year (mostly in Dec).

The two-year treasury yields, which mimics short-term rate hike bets, continues to rise for the fourth straight session to trade around 0.838 levels, up 1.90% so far this session, while the USD index     eases from near two-month highs, but remains better bid around 96.20 levels.

All eyes remain on the main determinant of next direction in gold, the US non-farm payrolls data, lined up for release on Friday.

Gold Technical Levels                                   

The metal has an immediate resistance at 1270 (round number) and 1277.23 (Oct 5 high). Meanwhile, the support stands at 1259.50 (200-DMA) below which doors could open for 1250 (mid-June lows).