Gold surrendered early gains to $1351 level and has now retreated to the lower end of its daily trading range.
A subdued US Dollar price action provided some initial boost to dollar-denominated commodities - like gold. The early uptick, however, lacked any strong follow-through momentum amid holiday-thinned liquidity conditions.
Meanwhile, a global recovery in equity markets, pointing to improving investor's sentiment weighed on the precious metal's safe-haven appeal and capped any additional gains.
It, however, remains to be seen if the retracement slide, from 3-week tops set on Friday, is able to find fresh buying interest at lower levels as investors continue to look for alternatives as a hedge against rising inflation.
The US market will remain closed on Monday in observance of the Presidents' Day holiday and hence, the commodity seems more likely to extend its consolidative price action.
Looking ahead, the upcoming release of FOMC meeting minutes on Wednesday might influence Fed rate hike expectations and eventually provide some fresh directional impetus for the non-yielding yellow metal.
Technical levels to watch
Immediate support is pegged near $1345-44 level, below which the commodity could slide back towards $1340 level before eventually dropping to its next support near the $1332-30 region.
On the upside, momentum beyond $1353-54 immediate hurdle could lift the metal back towards $1360 intermediate resistance en-route $1366 level, multi-month tops touched in January.
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