Gold reverses yesterday’s modest recover gains, back below $1315 level

   •  A goodish pickup in the USD demand prompts some fresh selling.
   •  Rising US bond yields/fading safe-haven demand add to the selling pressure.
   •  Wednesday’s FOMC decision should help determine the near-term trajectory.

Gold extended its steady decline through the mid-European session and dropped to fresh session lows in the last hour. 

Currently trading around $1313 area, the precious metal has now erased all of its modest recovery gains recorded in the previous session and remained within striking distance of over 2-week lows.

A goodish pickup in the US Dollar demand was seen as one of the key factors weighing on dollar-denominated commodities - like gold. Adding to this, resurgent US Treasury bond yields, amid expectations of more hawkish monetary policy outlook for the rest of the year, exerted some additional pressure on the non-yielding yellow metal. 

Meanwhile, indications of some stability returning back to financial markets, as depicted by a mildly positive trading sentiment around European equity markets, was further seen denting demand for traditional safe-haven assets and collaborated to the precious metal's offered tone. 

It would now be interesting to see if the commodity continues to find some buying interest ahead of the very important 200-day SMA as the focus remains on the upcoming Fed monetary policy decision, which should assist determine the commodity's next leg of directional move.

Technical levels to watch

Any subsequent weakness might continue to find some support near the $1307-05 region, below which the downfall could get extended towards $1300 round figure mark en-route $1294-93 horizontal support.

On the upside, $1316 level now seems to act as an immediate resistance, which if cleared could prompt a short-covering move back towards $1326 supply zone with some intermediate resistance near $1321-22 area.