Gold extends overnight sharp pull-back from 3-week tops

Gold remained under some selling pressure for second consecutive session and extended previous session's sharp retracement from 3-week tops. 

On Monday, the precious metal initially added on to Friday's softer US CPI-led up-move beyond $1300 mark and was being supported by ongoing geopolitical uncertainty. However, a strong US Dollar rally prompted profit taking, especially after the commodity's recent rally of over 3.5% from near two-month lows touched on Oct. 6.

Fading safe-haven demand, accompanied with a follow through greenback buying interest, continued weighing on the yellow metal through early European session on Tuesday. Meanwhile, physical demand in India for the holiday season has also failed to lift sentiment and stall the metal's retracement to 4-day lows, marginally below $1290 level.

In absence of major market moving economic releases, broader market risk sentiment and the USD price dynamics would remain key determinants of the metal's movement on Tuesday.

Technical levels to watch

Weakness below $1287 level could get extended towards $1284 horizontal support, below which the commodity could drop back below $1280 level and head towards retesting 100-day SMA support near the $1276-75 region.

On the upside, $1293 level now becomes immediate hurdle and is followed by a strong resistance near the $1300 handle. A convincing move back above the mentioned barriers might now lift the metal towards $1308-10 strong resistance.