Gold drops back to 200-DMA amid broad-based USD strength

   •  The USD extends recent upsurge and prompts some fresh selling.
   •  A follow-through uptick in the US bond yields adds to the pressure.
   •  A decisive break below 200-DMA would confirm further weakness.

Gold came under some renewed selling pressure on Wednesday and is currently placed at fresh session lows, around the $1305 region.

The precious metal failed to build on overnight sharp rebound from the very important 200-day SMA, led by the US President Donald Trump's decision to withdraw from an international nuclear deal with Iran, with a combination of factors prompting some fresh selling since the Asian session. 

The recent US Dollar rally remains uninterrupted and eventually weighed on dollar-denominated commodities - like gold. Meanwhile, the Iran uncertainty triggered a sharp rally in crude oil prices and was now seen fueling speculations that it might lead to higher inflationary pressure in the economy. The same is evident from a follow-through uptick in the US Treasury bond yields and further dented demand for the non-yielding yellow metal. 

Meanwhile, a subdued action around equity markets did little to boost the precious metal's safe-haven demand and stall the slide back closer to the very important 200-day SMA support. 

Technical levels to watch

A follow-through selling below 200-DMA has the potential to extend the downfall towards $1300 handle before the commodity eventually drops to test its next support near the $1294-93 region. On the flip side, $1310 area now becomes an immediate hurdle, above which the metal is likely to head back towards retesting the $1317-18 supply zone.