Gold comes down to $1305, Yellen holds the key

After an initial uptick to $1314 area, gold turned lower and eroded part of previous session's strong recovery gains from closer to 4-week lows.

Reviving safe-haven demand, amid rising geopolitical tensions over the Korean peninsula provided an initial boost and lifted the precious metal to near one-week highs. 

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However, resurgent greenback demand, with the key US Dollar Index rising to fresh 3-week tops, undermined the demand for dollar-denominated commodities and kept a lid on any further up-move. 

Adding to this, a slight improvement in investors risk appetite, as depicted by the prevalent positive trading sentiment around European equity markets and reinforced by a mildly positive sentiment around the US Treasury bond yields, further drove flows away from traditional safe-haven assets and collaborated to the yellow metal's retracement from higher levels. 

Moving ahead, investors focus would remain on the Fed Chair Janet Yellen's speech, where fresh clues over the central bank's near-term monetary policy outlook would provide fresh impetus for the non-yielding commodity.

Technical levels to watch

A follow through selling pressure below $1305 level is likely to drag the metal back towards $1300 area, below which the fall could get extended back towards $1291-90 strong horizontal support. 

On the upside, bulls would be eyeing for a clear break through $1315 immediate hurdle, above which the commodity seems to dart towards $1323 intermediate resistance en-route $1331-32 strong barrier.