Gold drift lower for second straight session, downside seems limited

Gold edged lower for the second consecutive session and moved farther from over 5-month tops touched in the previous session.

Currently trading around $1283 level, a modest US Dollar recovery prompted investors to take some profits off the table, following the precious metal's strong up-surge to the highest level since Nov. 9. A stronger tends to dent demand for dollar-denominated commodities - like gold. 

The profit-taking slide, however, has been limited amid rising geopolitical concerns and anxiety ahead of the crucial French Presidential election, which tends to benefit the yellow metal's safe-haven investment appeal. 

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Meanwhile, downbeat incoming US economic data now seems to have dampened investors' expectations over the Fed rate-tightening cycle and might continue lending support to the non-yielding metal.

The metal might now be influence by today’s release of housing market and industrial production data from the US, which although is unlikely to determine the metal’s near-term trajectory but is likely to provide some impetus for short-term traders.

Technical levels to watch

Immediate support is pegged near $1280 level, below which the metal is likely to extend the corrective slide towards $1270 area, with some intermediate support near $1274 level.

On the upside, momentum above $1288 level is likely to confront some resistance near $1295 level but is unlikely to hinder the commodity’s move towards reclaiming the $1300 mark.