Gold trading with negative bias below $1250 level

Gold failed to extend Friday's recovery bounce from 1-1/2 week low and remained capped below $1250 to trade with negative bias on Monday.

Currently trading around $1246 region, testing session lows, the prevalent positive sentiment around equity markets prompted traders to move away from traditional safe-haven assets, including gold. Adding to this, a fresh leg of up-move in the US treasury bond yields further seems to be driving flows out of the non-yielding metal and collaborating to the slightly weaker sentiment.

However, a broad based US Dollar weakness, against the backdrop of Friday's slightly dovish remarks by the New York Fed President William Dudley, helped limit further downslide for the commodity. A weaker greenback tends to benefit dollar-denominated commodities - like gold. 

Later during the day, speeches by various FOMC members - New York Fed President William Dudley, Philadelphia Fed President Patrick Harker and Richmond Fed President Jeffrey Lacker, would now be looked upon for fresh impetus. Meanwhile, the release of US ISM manufacturing PMI would also be looked upon to grab some short-term trading opportunities during early NA session.

Technical levels to watch

Immediate support is pegged near $1245 level, below which the commodity is likely to head back towards $1240 support before eventually breaking towards $1235 horizontal support ahead of $1225 level. On the flip side, a sustained move above $1250 region has the potential to lift the metal back towards the very important 200-day SMA hurdle near $1260, which if conquered should pave way for continuation of the metal's upward trajectory towards its next major resistance near $1275 region.