Gold consolidates just below $1300 mark, on track for highest weekly close since Oct. 2016

Gold seems to have entered a bullish consolidation phase and was seen oscillating in a narrow trading range, in the region of yearly tops around the $1295 level. 

The precious metal traded with a positive bias for the third consecutive session on Friday and the up-move was being supported by deteriorating investors' risk appetite, following a terrorist attack in Spain and political uncertainty in the US. 

Meanwhile, skepticism over the US President Donald Trump's ability to push through pro-growth economic policies had been weighing on the US Dollar and further benefitting dollar-denominated commodities - like gold. 

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Moreover, diminishing prospects for additional Fed rate hike action in 2017, especially after the FOMC meeting minutes released on Wednesday, remained supportive of growing demand for the non-yielding yellow metal. 

With today's up-move, the commodity has now recovered weekly losses and is on course to build on last week's strong gains. The metal remains on track to end on a positive note for the second consecutive week and could also register its highest weekly close since late October. 

Technical levels to watch

Bullish momentum beyond the $1300 handle could get extended towards $1306-07 horizontal resistance, above which the commodity is likely to aim towards testing its next major hurdle near the $1335-36 region in the near-term.

On the flip side, $1290 level now seems to protect the immediate downside, which if broken could extend the corrective slide towards $1280 level en-route $1274-72 important support.