Gold conslidates losses near 3-week lows

The XAU/USD pair dropped to its lowest level since May 24 at $1251.64 and went into a consolidation phase in the NA session. As of writing, the pair is trading at $1253.60, losing 0.6%, or $7.5, in the day.

As investors digested the FOMC statement and Chairwoman Yellen's remarks, the greenback built on its gains from yesterday, pushing the US Dollar Index to a fresh weekly high at 97.55. At the moment, the index is at 97.50, up 0.6% on the day.

• US Dollar pushes higher to weekly tops above 97.50

Data from the U.S.:

• US: Weekly initial claims was 237,000, a decrease of 8,000 from the previous week
• US: Import prices fall 0.3% in May, led by lower fuel prices; export prices decline 0.7%
• NY Fed: Business activity rebounded strongly

However, despite the broad-based greenback strength, the XAU/USD limited its losses as the weak market sentiment increased the demand for the safer precious metal. After a weak start to the day, the major equity indexes in the U.S. remain in the negative area with the Dow Jones Industrial Average losing 0.12% and the S&P 500 Index dropping 0.3% in the day. For the rest of the session, the risk aversion could help the pair continue recovering its recent losses.

Technical outlook

The CCI on the daily graph eased below the -100 mark, suggesting that the pair's bearish momentum is building up. The first technical support for the pair could be seen at $1251 (daily low) ahead of $1246 (May 18 low) and $1240 (May 17 low). On the upside, resistances locate at $1258 (50-DMA),  $1269 (20-DMA), $1280 (Jun. 14 high).