Gold reverses previous session's up-move, but holds above $1280 level

Gold edged lower on Wednesday and reversed all of its previous session gains in wake of a bout of mild profit-taking, albeit held above previous session low near $1280 region.

With geopolitical tensions between the US and N. Korea taking a backseat, a minor up-tick in the US treasury bond yields helped the key US Dollar Index to bounce off multi-week lows and was seen weighing on dollar-denominated commodities - like gold. 

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However, nervousness ahead of the crucial French Presidential elections might continue to support the precious metal's safe-haven appeal and collaborate towards limiting any immediate sharp downslide, at least for the time being. 

Moreover, the incoming US economic data continues to fade expectations for a faster Fed rate-tightening cycle and might also benefit the non-yielding yellow metal. 

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Meanwhile, the recent price-action seems to suggest near-term consolidative phase just below 5-month tops touched at the beginning of this week. In absence of any fundamental drivers, in-terms of major market moving economic releases, the broader market risk-sentiment and the US Dollar price-dynamics would continue to be key determinants of the metal's movement on Wednesday.

Technical levels to watch

Immediate support remains near $1280 level, below which the commodity is likely to extend the corrective slide towards $1272-70 support with some intermediate support near $1276 level. On the upside, $1289-90 area now seems to have emerged as immediate resistance, which if cleared could lift the pair towards multi-month highs resistance near $1295 level ahead of the key $1300 psychological mark.