Gold fails ahead of 100-DMA barrier, edges down to $1270 level

   •  Struggles to build on Friday’s recovery move. 
   •  Fails ahead of 100-DMA, despite sliding US bond yields and subdued USD. 
   •  Focus shifts to this week’s important monetary policy meetings. 

Gold edged lower at the start of a new trading week and eroded part of Friday's sharp recovery gains from 3-week lows. 

Currently trading around $1270 level, the precious metal failed just ahead of 100-day SMA hurdle and drifted lower despite a subdued US Dollar price action. A weaker greenback tends to boost demand for dollar-denominated commodities - like gold. 

Speculations that the Fed governor Jerome Powell could be the US President Donald Trump's favored candidate as the next Fed Chair triggered a sharp retracement in the US Treasury bond yields and kept the USD bulls on the back-foot, but did little to provide any fresh bullish impetus to the non-yielding yellow metal. 

Even, the prevalent cautious environment, which tends to underpin demand for traditional safe-haven assets,  failed to lend any support and stall the precious metal's slide back to the $1270 region. 

Meanwhile, investors are likely to remain cautious and refrain from placing aggressive bets ahead of monetary policy meetings of three major central banks - BoJ, BoE and FOMC, which might eventually contribute towards limiting any sharp immediate downslide, at least for the time being. 

Technical levels to watch

A follow through weakness below $1266 immediate support is likely to get extended towards Oct. monthly lows support near the $1260 region before the metal aims towards testing its next support near $1255 level.

On the upside, immediate strong resistance remains at 100-day SMA, near the $1275 region, above which a fresh bout of short-covering could lift the commodity back towards $1283-84 heavy supply zone.