Gold off 1-1/2 week lows, but remains under pressure around $1270

Gold recovered some of its early losses to 1-1/2 week low, albeit the up-move stalled near $1277.50 level and the metal has now retreated back to $1271 level.

The precious metal gapped lower on Monday and dropped to its lowest level since April 11 after centrist candidate Emmanuel Macron won the first round of French presidential election sparked a global risk-on trade and weighed heavily on traditional safe-haven assets. 

Adding to this, surging US treasury bond yields, on renewed optimism over the US President Donald Trump's tax reform plans, further drove flows away from the non-yielding yellow metal. 

However, a broad based greenback sell-off, with the key US Dollar Index dropping to fresh multi-week lows, extended some support and limited further downslide. A weaker greenback tends to boost demand for dollar-denominated commodities - like gold.

Meanwhile, a strong bullish opening in the European equity markets continued denting the metal's safe-haven appeal and collaborated towards capping any immediate swift recovery. 

With an empty US economic docket, broader market risk-sentiment would remain an exclusive driver of the commodity's move on Monday. Meanwhile, a scheduled speech by Minneapolis Fed President Neel Kashkari might also influence Fed rate-hiked expectations and provide some impetus later during the NY session.

Technical levels to watch

Weakness below session low support near $1265 level could get extended back towards the very important 200-day SMA near $1255-54 region, with some intermediate support around $1260 round figure mark.

On the upside, a sustained recovery move above $1280 level might trigger a short-covering bounce towards $1290 level ahead of  multi-month highs resistance near $1295 area.