Gold trims early strong gains to weekly tops as USD recovers post-ADP

Gold trimmed some of its early strong gains to $1282 level, weekly tops, and retreated to $1276 area after stronger ADP report.

Today's better-than-expected data on the US private sector employment helped the US Dollar pare some of its early losses and was eventually seen weighing on dollar-denominated commodities.

   •  US: Private Sector Employment Increased by 135,000 Jobs in September - ADP

Meanwhile, a mildly positive trading sentiment around European bourses, and indications of flat opening in the US equity markets, which tends to dent demand for traditional safe-haven assets, was also seen keeping a lid on the precious metal's up-move. 

Adding to this, a modest recovery in the US Treasury bond yields further drove flows away from non-yielding assets and collaborated to the yellow metal's retracement from higher levels. 

Traders now look forward to the release of US ISM non-manufacturing PMI for some fresh impetus ahead of a scheduled speech by the Fed Chair Janet Yellen, due later during the NY trading session.

The key focus, however, would remain on Friday's keenly watched official jobs data - NFP, which should play an important in determining the next leg of directional move for the commodity.

   •  US: Brace for weaker jobs data – BBH

Technical levels to watch

A follow through retracement back below 100-day SMA support near the $1272 region is likely to accelerate the fall back towards $1267-66 horizontal support before the metal eventually drops to its next major support near $1260 level.

On the upside, $1280 level remains immediate strong hurdle to conquer and a strong follow through buying interest beyond the mentioned barrier is likely to lift the commodity towards $1287 horizontal resistance ahead of $1290 level.