Gold drops to over two-week lows, below $1315 level

Gold remained under some selling pressure for the second consecutive session on Monday and dropped to over 2-week lows during early European session.

Currently trading around $1313 area, the precious metal was being weighed down by fading safe-haven demand as investors looked past the latest N. Korean missile launch over Japan. 

Adding to this, a modest pickup in the US Dollar demand further dented demand for dollar-denominated commodities and collaborated to the yellow metal's slide to fresh monthly lows. 

Meanwhile, reviving hopes for an additional Fed rate hike action by the end of this year, further reinforced by recent up-move in the US Treasury bond yields was also seen driving flows away from the non-yielding commodity. 

Hence, investors' focus would remain glued to the upcoming FOMC decision and the accompanying rate statement, which would help determine the next leg of directional move for the metal.

Technical levels to watch

Immediate support is pegged near $1309 level, below which the metal is likely to drift back towards the $1300 handle. On the upside, any recovery attempts might now confront fresh supply near the $1321 region, above which a bout of short-covering could lift the commodity towards $1332 level en-route $1340 strong horizontal barrier.