Gold corrects to $1285 level on firmer USD

Gold prices inched lower through on Tuesday and dropped to fresh session lows, near $1285 level during early European trading session.

The precious metal eroded part of yesterday's up-move back closer to the $1,300 level and was being weighed down by a modest pickup in the US Dollar demand, which tends to dent demand for dollar-denominated commodities. 

Adding to this, some signs of stability in global equity markets further dampened demand for traditional safe-haven assets and failed to assist the yellow metal to build on overnight gains. 

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Today's downtick would still be categorized as corrective in nature as investors continue to monitor geopolitical tensions over N. Korea and cautiousness ahead of the Jackson Hole Symposium, where fresh insight over the Federal Reserve's near-term monetary policy outlook would influence sentiment surrounding the non-yielding commodity.

Today's US economic docket lacks any major market moving economic releases. Hence, broader market risk sentiment and the USD price dynamics would be looked upon to grab some short-term trading opportunities. 

Technical levels to watch

A follow through retracement below $1283 level could get extended towards $1280 area, below which the metal is likely to head back towards retesting $1274-73 strong support. On the upside, $1290-91 zone now seems to have emerged as immediate resistance, above which the commodity is likely to make a fresh attempt towards conquering the $1300 handle.