Gold slides further below key $1200 level ahead of US jobs data

Gold continued with its recent descent and has now broken below the key $1200 psychological mark, dropping to its lowest level since late Jan. 

Currently trading around $1197 region, the bearish tone around the precious metal remained unchanged so far this week as the US treasury bond yields continued creeping higher. Growing market consensus that the Fed would eventually move towards raising interest rates at its meeting next week has been supportive of the recent strong up-surge in the bond yields and has been a key factor driving the yellow metal to these multi-week lows.

The commodity fell on Friday even as the key US Dollar Index seems to have halted its recent advance ahead of the keenly watched NFP data. Being inversely related to the buck, a weaker dollar typically benefits dollar-denominated commodities - like gold.  
Spot price fell below the technically important 100-day SMA support yesterday, which seems to have sparked a follow-up selling pressure and collaborating to the slide on Friday.

Today's official US labor market report would now be looked upon for fresh impetus as a good number would reaffirm March Fed rate-hike action and continue weighing on the non-yielding metal. 

Technical levels to watch

Immediate support is pegged near $1195 level, below which the metal seems to extend the downslide further towards $1188 support area ahead of $1181 level (Jan. 27 low). On the upside, a sustained recovery back above the $1200 handle might trigger a short-covering bounce towards $1207-08 resistance, en-route the 100-day SMA important support, now turned strong resistance near $1211-12 region.