Gold fails ahead of $1300 mark, retreats from 5-month tops on profit taking

Having failed to build on weekly bullish gap opening, gold reversed majority of its early gains to the highest level since Nov. 9 and has now retreated back to $1287 level. 

Escalating geopolitical tensions, in wake of North Korea's latest failed ballistic missile test, provided an initial boost to the precious metal's safe-haven appeal. This coupled with a softer tone surrounding the US Dollar, against the backdrop of Friday's disappointing retail sales and the latest CPI print, further benefitted dollar-denominated commodities - like gold. 

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The commodity, however, failed ahead of the key $1300 psychological mark as upbeat Chinese macro data seems to have eased concerns of a sharp economic slowdown for the world's second largest economy and prompted some profit taking amid holiday thinned liquidity conditions, with most European markets closed on Monday in observance of Easter Monday. 

In absence of any major market moving US economic releases, with the only scheduled release of Empire State Manufacturing Index, market anxiety ahead of the crucial French Presidential election is likely to limit any further profit-taking slide, at least for the time being. 

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Technical levels to watch

A follow through retracement below $1285 level seems to drag the commodity towards $1282 intermediate support ahead of $1276-75 horizontal support. On the upside, momentum back above $1293 level should now lift the metal towards $1300 mark, above which the upward trajectory is likely to get extended towards $1308 resistance area.