Gold bounces off lows, holds just below 7-week highs

Gold pared some of its early losses to session low near $1265 region and held with only minor losses just below seven-week tops touched earlier today.

Currently trading around $1268-69 area, the precious metal was seen digesting last week's strong gains of over 1% as investors look forward to a busy week of economic events/data, including the keenly watched NFP print on Friday. 

   •  Market movers for the week ahead - Rabobank

A modest US Dollar recovery from 13-month lows, which tends to dent demand for dollar-denominated commodities has kept a lid on the yellow metal's near-term upward trajectory. The pullback, however, turned out to be short-lived amid rising geopolitical tensions in the Korean peninsula, which supported the commodity's safe-haven demand.

This coupled with the US political uncertainty and fading expectations of any additional Fed rate hike action in 2017 further seems to be collaborating towards limiting any immediate sharp corrective slide for the metal. 

Moreover, today's price-action clearly seems to suggest dip buying interest at lower levels. Hence, a clear break through $1270 hurdle, leading to an extension of the metal's near-term up-move, now seems a distinct possibility.  

Technical levels to watch

Momentum above $1270 level should get extended towards $1279-80 horizontal resistance en-route $1284-85 strong barrier. Conversely, weakness below $1265 level would turn the metal vulnerable to extend the corrective slide back towards the very important 200-day SMA support near $1250 region with some intermediate support near $1255-54 zone.