• Weaker USD helps regain positive traction. • Subdued US bond yields supportive of the up-move. • Fading safe-haven demand might cap further gains.
Gold gained some positive traction on Wednesday and recovered a part of previous session's slump to its lowest level in over three weeks.
A big recovery in the US stock markets, which tends to dent demand for traditional safe-haven assets, exerted some heavy downward pressure on the precious metal on Tuesday. However, a mildly weaker US Dollar aided sentiment and extended some support to dollar-denominated commodities - like gold.
Meanwhile, a subdued action around the US Treasury bond yields was also seen prompting some dip-buying and collaborated to the non-yielding yellow metal's uptick through the early European session on Wednesday.
It would now be interesting to see if the commodity is able to sustain the recovery gains or the bounce is being utilized to initiate fresh short positions amid fading safe-haven demand on the back of some signs of stability in global stock markets.
Technical levels to watch
Immediate resistance is pegged near $1334 area, above which the commodity seems to aim towards surpassing $1340 supply zone before aiming to retest $1346 hurdle. On the flip side, the $1325-24 region now seems to protect the immediate downside, which if broken would expose $1311 horizontal support ahead of the $1300 mark.
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