Gold flirting with two-week lows amid fading safe-haven demand

Gold continued losing ground through early NA session and is currently placed at over two-week lows, around the $1312-11 region.

The precious metal started the week on back foot amid growing investors' appetite for riskier assets, which tends to dent demand for traditional safe-haven assets.

This coupled with a modest uptick in the US Treasury bond yields, which underpinned the US Dollar demand was further seen weighed on non-yielding/dollar-denominated commodities and collaborated to the yellow metal's slide to its lowest level since the end of August. 

Investors now look forward to the keenly awaited FOMC meeting for some fresh insights over the central bank's near-term monetary policy outlook, which would eventually help determine the next leg of directional move for the metal.

Although the Fed is widely expected to keep interest rates unchanged, investors would be looking for its plans to start shrinking its massive $4.5 trillion balance sheets in an effort to normalize monetary policy.

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With markets still pricing in around 60% probability for additional Fed rate hike action by the end of 2017, any hawkish signals would pave way for additional near-term corrective slide for the non-yielding commodity. 

Technical levels to watch

Immediate support is pegged near $1309-08 area, below which the metal is likely to accelerate the fall towards testing the $1300 round figure mark. On the upside, any recovery attempt now seems to confront fresh supply near $1316 area, which is closely followed by resistance near the $1320 region.