Gold jumps back to 2-week tops, around $1265 level

   •  Persistent USD weakness helps regain traction. 
   •  Weaker US bond yields provide an additional boost.
   •  Bullish momentum could extend towards 200-DMA hurdle.

Gold regained some fresh traction on Wednesday and moved back closer to 2-week tops during the early European session.

After yesterday's brief pause, the precious metal resumed with its recent recovery move from near 5-month lows and was being further supported by persistent greenback selling bias. In fact, the key US Dollar Index struggled near the 93.00 handle, despite the latest optimism over the long-awaited tax cut legislation, and underpinned demand for dollar-denominated commodities - like gold. 

Adding to this, a mildly softer tone around the US Treasury bond yields provided an additional boost to the non-yielding commodity and further collaborated to the yellow metal's up-move to the $1265 level.

Meanwhile, a subdued trading action around European equity markets did little to influence the precious metal's safe-haven appeal, with the USD/US bond yield dynamics acting as key determinants of the bullish momentum.

With the only scheduled release of existing home sales, today's US economic docket lacks any major market data. Hence, a follow-through momentum, towards retesting the very important 200-day SMA hurdle, now seems a distinct possibility.

Technical levels to watch

Immediate resistance remains near the $1269 region (200-DMA), above which the commodity seems to head towards $1274-76 supply zone. On the flip side, $1261-60 area now becomes an immediate support to defend and is followed by support near $1255 and $1252 horizontal level.