Gold rebounds from over two-week lows amid notable USD weakness

Gold ticked higher through early European session on Tuesday and recovered part of previous session's slump to the lowest level in over two-weeks. 

Currently trading around $1308-09 area, the precious metal's modest uptick on Tuesday was being supported by some renewed greenback selling bias. In fact, the key US Dollar Index has now eroded all of its previous session's gains and dropped to session lows near 91.60 area, which was eventually seen benefitting dollar-denominated commodities - like gold.

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Apart from the greenback weakness, the prevalent risk-on environment, on easing geopolitical tensions over the Korean peninsula, has not been supportive of traditional safe-haven assets and did little to provide any additional boost to the yellow metal's modest recovery move. 

Adding to this, growing market conviction that the Fed would eventually move towards raising rates by the end of this year and begin shrinking its massive $4.5 trillion balance sheet was also seen keeping a lid on any strong up-move for the non-yielding metal. 

With investors' focus glued to a two-day FOMC meeting starting today, broader market risk sentiment and the USD price dynamics would remain key determinants for the commodity's move through Tuesday's trading session.

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Technical levels to watch

Immediate resistance is pegged near $1312 level, above which the metal is likely to dart towards $1320 hurdle en-route its next resistance near the $1325 region.

On the flip side, $1305 level is likely to protect immediate downside, which if broken is likely to accelerate the slide even below the $1300 handle towards its next support near $1297 level.