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Gold bounces off lows, still in red below $1295

   •  Remains near one-month highs.
   •  Modest USD strength capping gains.
   •  Fading safe-haven demand creates additional headwind.

Gold reversed its early corrective slide to $1290 level and has now moved back within striking distance of Friday's one-month tops. 

A goodish US Dollar rebound, primarily led by a sell-off in the shared currency after German Chancellor Angela Merkel's failure to form a three-way coalition government, prompted some profit taking at the start of a new trading week. 

However, concern about an investigation into alleged Russian meddling in the 2016 US presidential election and uncertainty over the US tax reforms, coupled with negative tone around the US Treasury bond yields helped limit deeper losses. 

Meanwhile, some initial signs of stability returning back into global financial markets, as depicted by a strong recovery in the European equity markets, did little to boost the precious metal's safe-haven appeal and now seems to be only factor collaborating towards keeping a lid on any additional up-move.

With an empty US economic docket, the US bond yield dynamics and broader market risk sentiment would continue to be key determinants of the commodity's momentum through the NY trading session on Monday.

Technical levels to watch

On the upside, the $1295-97 region remains immediate strong resistance, which if conquered could lift the metal beyond the $1300 handle towards Oct. monthly highs resistance near $1306 level.

Meanwhile, on the downside, $1290 level now seems to have emerged as immediate support, below which the commodity could extend the corrective slide towards $1284 intermediate support en-route 100-day SMA support near the $1280 region.

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