Gold struggles near daily lows, US inflation data eyed for fresh impetus

   •  Reviving USD demand prompts some fresh selling on Tuesday.
   •  Rising US bond yields offset cautious sentiment in European markets. 
   •  Focus remains on the key US CPI data. 

Gold maintained its offered tone through the mid-European session and now seems to have entered a bearish consolidation phase.

Currently placed at the lower end of its daily trading range, a goodish pickup in the US Dollar demand was seen one of the key factors weighing on dollar-denominated commodities - like gold. This coupled with a positive tone around the US Treasury bond yields was further seen denting demand for the non-yielding metal. 

The negative factors, to some extent, were offset by the prevalent cautious sentiment around the European equity markets, which was seen lending some support to the precious metal's safe-haven appeal and helped limit deeper losses, at least for the time being.

Tuesday's key focus would remain on the latest US consumer inflation figures, which would help gauge the
Fed's rate hike stance and eventually provide some fresh directional impetus. 

Looking at the broader picture, the commodity has been finding some decent support near the $1315 region but recovery attempts were being sold into near the $1325 area. Hence, it would be prudent to wait for a decisive break through the mentioned trading range before positioning for the commodity's next leg of directional move. 

Technical levels to watch

A decisive break below $1315 support now seems to turn the metal vulnerable to aim towards testing 100-day SMA support near the $1302 region with some intermediate support near the $1310-08 region. 

Alternatively, a sustained move beyond $1325 supply zone is likely to trigger a short-covering bounce towards $1333 level en-route $1340 heavy supply zone.