Gold consolidates near 6-week tops, above $1260

Gold held on to the post-FOMC strong gains to six-week tops and now seems to have entered a consolidation phase just below $1265 level. 

The precious metal built on overnight bullish momentum and continued marching higher on Thursday in reaction to a dovish assessment of the Federal Reserve's latest monetary policy statement. 

   •  US political headwinds mean a December Fed hike most likely - ING

As was widely expected, the Fed stood pat on interest rates and reiterated that it would start reducing its $4.5 trillion massive balance sheet relatively soon. The disappointment, however, came from the central bank's cautious outlook on inflation, which raised uncertainty over the timing of next rate hike action and benefitted the non-yielding metal.

A modest US Dollar recovery, led by a pickup in the US Treasury bond yields kept a lid on any additional up-move. Meanwhile, the prevalent cautious sentiment around European equity markets was seen lending some support to the yellow metal's safe-haven appeal. The diverging factors failed to provide any fresh impetus and led to a range bound price action on Thursday. 

Traders would now take cues from the US macro data - durable goods orders, goods trade balance and weekly jobless claims, which would influence the greenback and provide some fresh impetus for dollar-denominated commodities - like gold.

   •  US: Durable goods orders to post 0.5% m-o-m - Nomura

Technical levels to watch

A follow through buying interest beyond $1265-66 immediate resistance is likely to lift the metal towards $1280 horizontal hurdle with some intermediate resistance near $1270 level. Alternatively, corrective slide below $1260 level might prompt traders to take some profits off the table and drag the commodity initially towards $1255-54 support en-route 100-day SMA strong support near $1249 region.