Gold struggles to build on overnight rebound from yearly lows

   •  Resurgent USD demand prompts some fresh selling on Tuesday.
   •  Sliding US bond yields/cautious mood helps limit further downside.

Gold struggled to build on overnight rebound from fresh YTD lows and came under some renewed selling pressure on Tuesday.

After yesterday's pull-back, the US Dollar demand picked up pace on Tuesday and was seen as one of the key factors prompting some fresh selling around dollar-denominated commodities - like gold.

Further downside, however, remained cushioned amid a weaker tone around the US Treasury bond yields, which helped the non-yielding yellow metal to hold its neck just above multi-month lows touched in the previous session. 

This coupled with the prevalent cautious mood, as depicted by a subdued opening across European equity markets, underpinned the precious metal's safe-haven appeal and might also contribute towards limiting any further downside, at least for the time being.

Looking at the broader picture, the commodity has been oscillating within a broader trading range, possibly waiting for the next big catalyst before the next leg of directional move. Hence, it would be prudent to wait for a decisive break through the near-term consolidation phase before positioning for the commodity's near-term trajectory.

Technical levels to watch

Immediate support remains near the $1285 region, which if broken decisively is likely to accelerate the fall towards $1277 intermediate level en-route $1270-68 strong support. On the upside, the $1295-97 region might continue to act as an immediate resistance, above which a bout of short-covering could lift the commodity back above the $1300 handle towards retesting the very important 200-day SMA, currently near the $1307 region.