Gold flirting with yearly lows, below $1290 level

   •  Renewed USD buying interest prompts some fresh selling during the European session.
   •  Retracing US bond yields/cautious mood might help limit immediate sharp downside.

Gold met with some fresh supply during the European trading session and has now slipped back closer to YTD lows, around the $1287-86 region.

After an early brief pause, the US Dollar picked up over the past couple of hours and was seen as one of the key factors prompting some fresh selling around dollar-denominated commodities - like gold.

The downfall, however, remained limited, at least for the time being, with a combination of supporting factors helping the commodity to hold just above a three-day-old trading range support.

A modest retracement in the US Treasury bond yields was seen lending some support to the non-yielding yellow metal. This coupled with a cautious sentiment around European equity markets further underpinned the precious metal's safe-haven appeal and collaborated towards limiting further downside. 

It would now be interesting to see if bears are able to push it through the trading range support amid near-term oversold conditions and in absence of any major market moving economic releases from the US. 

Meanwhile, the Fed  Governor Lael Brainard's scheduled speech during the NA session might influence the price-action and help traders grab some short-term opportunities on the last trading day of the week. 

Technical levels to watch

A follow-through selling pressure has the potential to continue dragging the commodity further towards $1275 intermediate level en-route its next major support near the $1266-67 region. On the upside, any momentum above $1290 level is likely to confront fresh supply near the $1294-95 region and is followed by a strong hurdle near the $1300 handle.
 

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