Gold inching back closer to over two-month tops, stable around $1290

Gold extended overnight strong rally and has now climbed back closer to over two-month highs touched last Friday, around $1290 level. 

On Wednesday, the precious metal rose sharply after minutes from the Federal Reserve's July meeting hinted towards a possible delay in further rate hikes. This coupled with the latest news that two White House business advisory groups have disbanded continued exerting pressure on the US Dollar and benefitted dollar-denominated commodities - like gold. 

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With investors now looking past yesterday's dovish FOMC minutes, a modest greenback recovery, always backed by a pickup in the US Treasury bond yields, collaborated towards keeping a lid on further up-move for the non-yielding yellow metal, at least for the time being.

Later during the NA session, the second-tier US economic data, followed by scheduled speech by Dallas Fed President Robert Kaplan would now be looked upon for some fresh impetus. 

From a technical perspective, the commodity has managed to rebound from $1268-67 important horizontal support. Hence, resumption of the prior bullish trajectory, even beyond the key $1300 handle, now seems a distinct possibility. 

Technical levels to watch

Momentum above $1290 level is likely to confront resistance near $1294-96 region, above which the metal seems all set to surpass the $1300 mark and aim towards testing its next hurdle near $1306-07 zone. 

On the flip side, $1282 level now becomes an immediate support to defend, which if broken might turn the metal vulnerable to head back towards retesting $1271-70 support area.