Gold steady near one-month highs, USD strength capping up-move

Gold extended its consolidative price-action for the second consecutive session and held steady near one-month highs just below $1270 level.

Renewed worries over Greece's financial situation dented investors' appetite for riskier-assets. This coupled with escalating geopolitical tension, following N. Korea's warning of conducting more missile tests in the coming days, remained supportive of the precious metal's safe-haven appeal. 

Meanwhile, persistent greenback buying interest, with the key US Dollar Index extending its rebound from 6-1/2 month lows touched last week, for the time being has kept a lid on further up-move for dollar-denominated commodities - like gold. 

   •  US Dollar moves to session highs near 97.70

Any immediate downslide, however, is likely to be limited amid political uncertainty stemming out of the upcoming UK general election on June 8. The latest UK elections polls have been showing narrowing lead for the ruling Conservative Party and hence, fresh buying interest is more likely to emerge at lower levels as a hedge against any adverse outcome. 

Later during the NA session, the US economic docket might influence market expectations over additional Fed rate-hike moves through 2017 and provide some fresh impetus for the non-yielding metal.

Technical levels to watch

Currently trading around $1268 level, a sustained break through $1270 level is likely to accelerate the up-move towards $1275-76 important resistance before the commodity aims towards testing its next hurdle near $1284 area.

On the downside, $1265 level remains immediate support to defend, which if broken could drag the metal immediately towards $1260 support en-route $1254-53 horizontal support area.