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Gold headed back to yesterday's 3-week tops

   •  Weaker USD helps break through a 3-week old trading range. 
   •  US tax legislation concerns support safe-haven demand. 

Gold regained some fresh bullish traction on Thursday and inched back closer to multi-week tops touched in the previous session.

Ongoing concerns over the US tax reforms plan kept the US Dollar on the back-foot and boosted demand for dollar-denominated commodities - like gold. The commodity finally broke through a three-week-old trading range and touched an intraday high level of $1287. 

However, a late rebound in the US equity markets weighed on the precious metal's safe-haven appeal and prompted some profit taking at higher levels, dragging it back to $1281-82 resistance turned support zone.

Increasing nervousness over the US tax legislation kept investors on the edge and the same is evident from a follow-through USD weakness. This coupled with the prevailing cautious sentiment around equity markets helped the yellow metal to catch some fresh bids on Thursday.

Meanwhile, the market seems to have largely ignored the latest World Gold Council (WGC) report, showing that the demand for gold dropped to lowest levels seen in eight years last quarter, with reviving safe-haven demand supporting the commodity's modest uptick through the early European session.

Technical levels to watch

Currently trading around $1284 level, immediate resistance is seen near the $1289-90 region, above which the metal is likely to test $1295 intermediate hurdle ahead of the $1300 handle.

On the downside, $1282-80 region now becomes an immediate support to defend, which if broken could drag the metal back towards $1276 area (100-day SMA) en-route the $1269 strong horizontal support.
 

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