Gold holding stable above $1200 mark amid risk-off mood

Gold gained some fresh traction on Monday and rose to fresh seven week high amid prevalent risk-off mood. 

Currently trading around $1203 region, off session peak level of $1208, renewed concerns of a 'hard Breixt', following weekend news report over the UK Prime Minister Theresa May's upcoming speech on Tuesday, triggered a fresh wave of global risk aversion and provided a boost to the precious metal. 

Moreover, receding post-US election optimism over prospects of stronger US economic growth, led by the incoming Trump administration, drove flows back towards the yellow metal. 

However, a solid greenback comeback, with the key US Dollar Index staging a strong recovery of nearly 0.5% for the day, was seen collaborating towards restricting further upside for dollar-denominated commodities, including gold.

Going forwards, lack of fresh fundamental drivers, with an empty economic docket, would keep the yellow metal dependent on broader market risk sentiment and US Dollar price-dynamics. 

Technical levels to watch

A follow through retracement below $1200 mark, and a subsequent break below $1194 support is likely to accelerate the slide back towards 50-day SMA support near $1185 region. On the upside, sustained move above multi-week highs resistance near $1206-08 region has the potential to continue boosting the metal further towards $1215-16 resistance area, en-route its next major hurdle near $1330 region.