Gold regains traction, inching back closer to Friday's 9-month highs

Gold regained traction on Monday and inched back closer to an intra-day nine-month swing high level of $1300, touched on Friday.

Safe-haven demand, in wake of a terrorist attack in Spain, coupled with heightened US political uncertainty lifted the precious metal on Friday to its highest level since the US Presidential election. The yellow metal, however, reversed course on reports that senior White House advisor Steven Bannon was leaving his post, which was seen as a positive for the Trump administration’s pro-growth economic agenda.

A mildly softer tone around the US Treasury bond yields seems to be the only factor benefitting the non-yielding commodity at the start of a new trading week. The market even seems to have largely ignored a modest pickup in the US Dollar demand, which tends to weigh on dollar-denominated commodities - like gold. 

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In absence of any major market moving economic releases, broader market risk sentiment is likely to act as an exclusive driver of the commodity's move on Monday. However, the key focus would be on the Fed’s annual central bank symposium in Jackson Hole, where comments on withdrawal of extraordinary monetary stimulus would be the next big catalyst determining the next leg of directional move for the metal. 

   •  Jackson Hole Symposium: Focus will be on Draghi and Yellen - ANZ

Technical levels to watch

On a sustained move back above $1290 level, the metal is likely to make a fresh attempt towards conquering the key $1300 psychological mark with some intermediate resistance near $1295-96 area. Meanwhile, on the downside, weakness back below $1284 level now seems to drag the commodity below session lows support, near the $1280 region, towards testing its next support around $1274-73 zone.