Gold erases modest recovery gains, weakens to $1320

Having staged a minor recovery on Monday and a subsequent modest rise to $1325 on Tuesday, Gold resumed its near-term weakening trend and has now erased all of its early tepid gains to currently trade back around $1320 level. 

A broad based US Dollar strength has been the key factor weighing on the yellow metal, which touched a one month low level during early Asian session on Monday. The precious metal came under renewed selling pressure on Tuesday amid the prevalent bullish sentiment surrounding the greenback. 

Investors now eye the release of next major fundamental trigger, US monthly jobs report on Friday that would determine the Federal Reserve's monetary policy stance. The Fed’s policy path would determine the near-term outlook for the greenback and eventually drive dollar-denominated commodities, including gold. 

Technical levels to watch

On the immediate downside, $1315 level remains immediate support to defend, which if broken seems to turn the commodity vulnerable to break through $1305-1300 strong support and head towards testing 100-day SMA support near $1290-92 region.

Meanwhile on the upside, any recovery attempt is likely to confront strong hurdle at 50-day SMA support break-point, now turned immediate resistance, near $1333-35 region. Momentum above this immediate resistance could get extended but is likely to be capped around $1345-47 strong horizontal resistance area.