Gold hits fresh two-month lows amid notable USD demand

Gold remained under some selling pressure for the fifth straight session and has now slipped below 100-day SMA to its lowest levels since March 16.

Currently trading around $1220 region, the precious metal is being weighed down by persistent US Dollar buying interest and the prevalent risk-on environment.

Against the backdrop of growing bets for an eventual June Fed rate-hike action, surging US treasury bond yields underpinned the greenback demand and was seen driving flows away from non-yielding / dollar-denominated commodity, gold. 

Adding to this, improving investors' appetite for riskier assets, as depicted by gains in European equity markets and indications of a positive opening for the US indices, further dented demand for the yellow metal's safe-haven appeal. 

In absence of any major market moving economic releases from the US, near-term Fed monetary policy outlook would remain a key determinant of the commodity's near-term trajectory. Hence, today's speeches by Boston Fed President Eric Rosengren and Dallas Fed President Robert Steven Kaplan would now be looked upon for some fresh impetus.

   •  Commodities: Prices have fallen, but should we be worried? - HSBC

Technical outlook

A follow through selling pressure would confirm a fresh bearish break-down and expose $1205 strong horizontal support, while $1217 and $1210 level could extend some intermediate support. 

On the flip side, any recovery attempt beyond $1225 immediate support might continue to confront resistance near $1229-30 area, above which a fresh bout of short-covering could lift the metal back towards $1236 hurdle en-route its next major barrier near $1240-42 region.