Gold surrenders majority of its early recovery gains
• A modest USD uptick prompting some fresh selling.
• Risk-on mood adds to the downward pressure.
• Wednesday’s FOMC meeting to provide fresh directional impetus.
Gold failed to build on the early recovery move beyond 100-day SMA and has now retreated back to the lower end of its daily trading range.
A modest pickup in the greenback demand, with the key US Dollar Index reclaiming the 94.00 handle, has been one of the key factors weighing on dollar-denominated commodities - like gold.
Meanwhile, investors now seemed to look past the latest German political turmoil and hence, a fresh wave of global risk-on trade was further seen denting the precious metal's safe-haven appeal.
With December Fed rate hike move nearly priced in the market, Wednesday's FOMC meeting minutes might provide clues over the central bank's monetary policy outlook for 2018 and eventually provide some fresh directional impetus for the non-yielding yellow metal.
In the meantime, broader market risk sentiment and the USD price dynamics would continue to play a key role in determining the commodity's movement on Tuesday.
Technical levels to watch
Immediate support is pegged near $1274 level, below which the metal is likely to drift back towards $1269 intermediate support en-route a strong near-term base near the $1262-60 region.
On the upside, sustained momentum beyond the $1280-81 region (100-day SMA) could get extended towards $1285-86 supply zone before the commodity to make a fresh attempt to surpass $1294-95 hurdle towards reclaiming $1300 handle.