Gold eases from Friday's 4-week high

Gold extended retracement from Friday's 4-week high and is now retesting the very important 200-day SMA region.

Currently hovering around $1274 level, broad based greenback strength, as measured by the overall US Dollar Index, is weighing on dollar-denominated commodities. However, the prevalent cautious sentiment around European equity markets is boosting the metal's safe-haven appeal and limiting any sharp slide.

From a broader perspective, the yellow metal lacks a firm near-term direction and remains confined within a trading range around 200-day SMA as markets anxiously await for further clarity on the timing of next Fed rate-hike action and US Presidential election results. 

Later during the day, the Fed's preferred inflation gauge, Core PCE Price Index, would be looked upon for short-term momentum play ahead of a slew of central bank monetary policy decisions, which might trigger a fresh bout of volatility across global financial markets and derive the precious metal's safe-haven demand.

Technical levels to watch

From current levels, weakness below 200-day SMA near $1273 is likely to drag the commodity towards $1267 before the metal eventually drops to $1261-60 support area. On the upside, sustained strength back above $1280, leading to a subsequent move through Friday's 4-week high resistance near $1284-85 region, seems to pave way for further near-term recovery for the metal back towards $1300 psychological mark.

GOLD from Tip TV Productions on Vimeo.