Gold snapped three consecutive days of winning streak and edged lower at the start of a new trading week, eroding part of Friday's strong gains to 6-day highs.
The precious metal stalled last week's recovery move from one month lows and came under some fresh selling pressure amid a modest pick-up in the US Treasury bond yields. The latest comments by San Francisco Fed President Williams, hinting towards normalization of the balance sheet this year remained supportive of the mildly positive tone around the US bond yields and was seen driving flows away from the non-yielding yellow metal.
This coupled with signs of stability in the global financial markets further weighed on traditional safe-haven assets and collaborated to the commodity's retracement from closer to $1260 level touched on Friday.
Later during the NA session, the release of durable goods orders data from the US would influence the US Dollar price-action and provide some fresh impetus for dollar-denominated commodities - like gold.
Investors’ focus, however, would remain glued to the Fed Chair Janet Yellen's remarks on Tuesday, for clues over the timing of next rate hike move and the central bank's plans to trim the balance sheet, which should help determine the next leg of directional move for the commodity.
• The week ahead: United States - Nomura
Technical levels to watch
A follow through retracement below $1253 level could get extended towards $1250 support, which if broken might turn the metal vulnerable to head back towards testing its next strong horizontal support near $1243-42 region.
On the flip side, $1256-57 area now seems to act as immediate resistance, above which the commodity is likely to aim to surpass $1260 hurdle before eventually darting towards its next barrier near $1265-67 region.
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