Gold hangs near 4-week low, weighed down by hawkish Fed outlook

Gold extended previous session's post-FOMC slump and dropped to near four week low level near $1295 level on Wednesday. 

The precious metal remained under some selling pressure for the fourth trading session in the previous five and has now corrected in excess of 4% from over one-year tops, touched earlier this month. 

The US Dollar rallied hard after the Fed policy statement pointed to one more interest rate hike in 2017. This coupled with a plan to start shrinking the Fed's massive $4.5 trillion balance sheet weighed heavily on dollar-denominated/non-yielding precious metal. 

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Meanwhile, the prevalent cautious sentiment, further reinforced by a modest retracement in the US Treasury bond yields, was seen lending some support to the yellow metal's safe-haven demand and helped limit deeper losses, at least for the time being. 

Technical levels to watch

A follow through selling pressure has the potential to continue dragging the commodity towards its next support near $1295 level ahead of the $1284 region.

On the upside, sustained move back above $1300 mark could help the metal to recover back towards the $1308-09 region with some intermediate resistance near $1305 level.