Gold extends drop from 2-year highs, near $ 1280

Gold extends a sharp reversal from two-year highs in the Asian session, as a favourable risk sentiment persists after the Asian equities rebounded, following the news of the suspension of Britain's campaign for next week's referendum.

Gold re-attempts $ 1280?

Currently, gold now trades -0.11% lower at 1279.12, moving-off session lows struck at 1276.46 in the last hour. The bull faced exhaustion above $ 1300 mark and quickly retreated below the last, giving up almost entire rise to fresh two-year highs reached yesterday at $ 1315.63.

The gold dropped sharply following the suspension of Brexit campaign after a Member of Parliament, Jo Cox, was shot dead less than a week before the EU referendum scheduled on June 23rd.

The bullion rose to the highest levels since Aug 2014 on Thursday after the Fed decision, which turned out to be dovish. Gold tends to benefit in a low interest rates environment as it is a non-interest bearing investment asset.

Gold Technical Levels                                   

The metal has an immediate resistance at 1303.79 (May 2 high) and 1303.14 (200-WMA). Meanwhile, the support stands at 1280 (round number) below which doors could open for 1271.58 (10-DMA).