Gold hits 10-1/2 month low amid surging bond yields and USD

Gold extended its recent bearish slide and has now dropped to hit its lowest level since early February in the aftermath of hawkish Fed statement.

Currently trading around $1138, Wednesday's FOMC decision to raise its key lending rate and upgrade forecast for 2017 sparked a rally in US Treasury bond yields and is weighing heavily on the non-yielding precious metal. The policymakers now projected three interest-rate hikes in 2017 as compared to previously forecasted two. 

Hawkish outlook also trigger a greenback rally across the board, with the overall US Dollar Index hitting a fresh 13-year highs, and is exerting further selling pressure around dollar-denominated commodities, including gold.

Technical levels to watch

Immediate support on the downside is seen at $1125 level below which the commodity seems vulnerable to head towards testing $1108 support (Jan. 29 low). On the upside, $1140 level now becomes immediate resistance, which is closely followed by resistance near $1145 region and $1150 level.