Gold tumbles to $1200 handle on broad US dollar strength

Extending its slide further below 100-day SMA, Gold on Monday fell to $1200 as the US Dollar continues to gain traction on Federal Reserve chief Janet Yellen's comments that the central bank should raise interest rates very soon.

On Friday the precious metal dropped back below 100-day SMA for the first time since late Jan. after US GDP growth for the first quarter was revised higher. Adding to it, Fed chair Janet Yellen's hawkish comments that the Fed would increase interest rates "in the coming months" spurred further rally in the greenback, thus damaging demand for dollar-denominated commodities like gold.

As the US Dollar continues with its bullish momentum, the yellow metal extended its slide on Monday for ninth straight session and dropped to its lowest level since mid-Feb. The metal has managed to recover a bit from $1200 mark to currently trade near $1204 level. Traders will now closely watch for a break-down below $1200 handle, which if breached should open room for further near-term depreciating move for the precious metal.

Technical levels to watch

Below $1200 mark, the metal seems to immediately drop to $1190 (Feb. 16 lows) and the fall could further get extended towards testing the very important 200-day SMA support, currently near $1163-60 region.

Conversely, recovery from $1200 mark now seems to face immediate resistance at 100-day SMA support break-point, now turned immediate resistance near $1214-15 region. With daily RSI heading towards near-term oversold territory, any follow through recovery back above 100-day SMA seems to assist the metal further towards $1227-30 horizontal resistance.