Gold clings to modest gains above $1460 level, lacks follow-through

• Gold gains some traction amid persistent US-China trade uncertainty.
• Sliding US bond yields undermined the USD and remained supportive.
• The uptick is likely to remain capped ahead of the FOMC policy update.

Gold edged higher on the first day of a new trading week and recovered a part of Friday's post-NFP slide to multi-day lows.

The latest US monthly jobs report surpassed most optimistic estimates, which provided a goodish intraday lift to the US dollar and eventually prompted some aggressive selling around the dollar-denominated commodity.

Focus on trade, FOMC

However, persistent uncertainty over a potential phase one trade deal between the world's two largest economies extended some support to the precious metal's perceived safe-haven status and helped gain some traction on Monday.

It is worth mentioning that top White House Economic Adviser, Larry Kudlow confirmed on Friday that the December 15 deadline to impose new tariffs on around $156 billion worth Chinese products remains in place.

Kudlow also said that the US President Donald Trump is pleased with the progress in trade negotiations, which added to a flurry of recent conflicting trade signals and kept a lid on the optimism and weighed on investors' sentiment.

Adding to this, a pullback in the US Treasury bond yields, which kept the USD bulls on the defensive, further provided an additional boost to the non-yielding yellow metal, albeit the uptick seemed to lack any bullish conviction.

Moreover, investors might also be reluctant to place any aggressive bets ahead of the upcoming event risk, the latest FOMC monetary policy update, which might further contribute towards capping any runaway rally.

Hence, it will be prudent to wait for some strong follow-through buying before positioning for any further intraday appreciating move amid absent relevant market moving economic releases from the US.

Technical levels to watch