Gold spikes to fresh session tops, further beyond $1230 level

   •  The US midterm election results-led USD weakness helps regain positive traction.
   •  A fresh leg of a downfall in the US bond yields provides an additional boost.
   •  Further gains are likely to remain capped amid the prevalent risk-on mood.

Gold quickly reversed a knee-jerk slide to four-day lows and was now seen building on its intraday positive momentum further beyond $1230 level. 

The broader market sentiment was driven by the incoming US midterm election results and was seen as one of the key factors influence the precious metal's price action during the Asian session.

With the official results confirming a split Congress, the prospect of legislative gridlock was seen as a negative catalyst for the US Dollar and underpinning demand for the dollar-denominated commodity. 

This coupled with declining US Treasury bond yields provided an additional boost to the non-yielding yellow metal and remained supportive of a solid intraday rebound from a four-day low level of $1223.

It, however, remains to be seen if bulls are able to maintain their dominant position or the up-move runs into some strong resistance at higher levels amid the prevalent strong risk-on mood, which tends to dent the precious metal's safe-haven status. 

Moreover, investors might also be reluctant to place any aggressive bets ahead of the latest FOMC monetary policy update on Thursday, which might help determine the commodity's next leg of the directional move. 

Hence, it would be prudent to wait for a strong follow-through buying before traders start positioning for any further near-term appreciating move amid absent relevant market moving economic releases on Wednesday.

Technical levels to watch

Any subsequent up-move is likely to confront stiff resistance near the $1237-39 region before the metal eventually aims to retest multi-month highs, around the $1243-44 area. 

On the flip side, the $1227-26 area now becomes an immediate support to defend, which if broken might accelerate the fall towards $1223 horizontal zone en-route the $1217-15 strong support.