Gold reverses a major part of previous session’s strong gains

   •  A strong USD rebound prompts some aggressive selling.
   •  Improving risk-appetite adds to the downward pressure.
   •  Gains some respite from disappointing US weekly jobless claims.

Gold extended its steady decline through the mid-European session and retreated farther from YTD highs, retested in the previous session.

A strong US Dollar rebound, following the release of latest FOMC meeting minutes, prompted some aggressive selling during the NY trading on Wednesday. The greenback continued gaining positive traction on Thursday and kept exerting downward pressure on dollar-denominated commodities - like gold.

This coupled with growing bets for a faster Fed monetary policy tightening cycle and a modest uptick in the US Treasury bond yields further collaborated towards driving flows away from the non-yielding yellow metal.

Moreover, a slight improvement in investors' risk-appetite, as depicted by a minor rebound in equity markets, further weighed on the precious metal's safe-haven appeal and did little to stall the downfall back closer to $1340 level. 

The selling pressure abated, at least for the time being, following the release of higher than expected US weekly jobless claims data. Moving ahead, the USD price dynamics/broader market risk sentiment might continue to act as key determinants of the commodity's movement through Thursday's trading session.

Technical levels to watch

Weakness below $1340 level is likely to get extended towards $1332 horizontal level before the commodity eventually drops to test $1326-25 support area. On the upside, any up-move might continue to confront strong resistance near the $1352-53 region, above which the commodity seems to aim back towards retesting $1365-66 supply zone.