Gold surrenders early modest gains, turns neutral around $1313 level

   •  A modest USD uptick keeps a lid on the attempted recovery move.
   •  Fading safe-haven demand further collaborates towards capping gains.

Gold surrendered a major part of its early modest gains and is currently placed in the neutral territory, around the 1313-12 region.

The precious metal did attempt to build on the previous session's late rebound from near one-week lows and gained some positive traction on the back of a mildly softer tone surrounding the US Treasury bond yields. The uptick, however, lacked any strong conviction and a combination of negative forces kept a lid on any meaningful up-move.

With investors looking past last week's dovish FOMC message, a follow-through US Dollar buying was seen as one of the key factors weighing on the dollar-denominated commodity. This coupled with improving risk sentiment further dampened the precious metal's safe-haven status and collaborated towards capping gains.

It would now be interesting to see if the non-yielding yellow metal is able to attract any fresh buying at lower levels or the current pull-back marks the end of the recent positive momentum witnessed over the past 5-1/2 month or so. Market participants now look forward to the release of the US ISM non-manufacturing PMI for some fresh impetus.

Technical levels to watch

Any meaningful slide below $1310 level is likely to find some support near the $1303 horizontal level and is closely followed by the $1300 psychological mark, which if broken might prompt some additional weakness further towards $1294-93 support area. On the flip side, the $1316-17 area now seems to have emerged as an immediate resistance, above which the commodity is likely to retest $1321 supply zone before eventually darting towards nine-month tops, around the $1326 region.