Gold traded with a mild negative bias around the $1,825 region, or daily lows, during the early North American session, albeit lacked any follow-through selling. A goodish US dollar rebound from one-month lows in reaction to St. Louis Fed President James Bullard's hawkish comments, saying that the US central bank should taper asset purchases this fall and go fairly rapidly. This, in turn, was seen as a key factor that weighed on the dollar-denominated commodity. Apart from this, a relatively flat opening in the US equity markets further acted as a headwind for traditional safe-haven assets, including gold.

The downside, however, remains cushioned, at least for the time being, amid signs that the Fed will wait a bit longer before slowing its massive monetary support. Dovish Fed expectations, along with a fresh leg down in the US Treasury bond yields extended some support to the non-yielding gold. Moreover, the XAU/USD, so far, has managed to hold its neck above the very important 200-day SMA. This further favours bullish traders and supports prospects for additional gains. Some follow-through buying beyond the monthly swing highs, around the $1,834 region, will reaffirm the outlook and pave the way for a further near-term appreciating move.