Gold attempts a tepid recovery, turns positive at $1172

Gold attempted a tepid recovery move on Tuesday and has now moved to a fresh session peak, albeit remained closer to 10-month low touched on Monday.

Currently trading with mild positive bias, around $1172 region, the precious metal has managed to recovery from session low, near $1165 region touched during Asian session, amid stalling US Dollar up-move. The recovery move, however, is likely to remain tepid as the prevalent upbeat sentiment surrounding European equity markets might now weigh on the metal's safe-haven investment appeal.

Moreover, market already seems to have priced-in a certain Fed rate-hike action in December and is also building on expectations of faster rate-tightening cycle in 2017, which might continue to dent demand for the non-yielding precious metal. Hence, next week's FOMC meeting would be the next big trigger determining the greenback's near-term trajectory and eventually a key driver for dollar-denominated commodities - like gold.

In the meantime, Thursday's ECB monetary policy decision has the potential to trigger volatility in global financial market and hence, might provide some impetus for the metal's safe-haven demand.

Technical levels to watch

Any further up-move from current levels is likely to confront resistance near $1175 region above which a fresh bout of short-covering could lift the metal beyond $1180 resistance towards weekly high resistance near $1188 level. On the downside, session low near $1165 region might continue to protect immediate downside, which if broken decisively is likely to drag the commodity back towards $1160 before eventually breaking through 10-month lows support near $1157 level towards testing its next major support near $1152-50 region.

1. R3 1183.70
2. R2 1179.50
3. R1 1174.50
PP 1170.30
1. S1 1165.30
2. S2 1161.10
3. S3 1156.10

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