Gold consolidates in a range above $1310, US CPI awaited


   •  Fails to build on overnight rebound from 200-DMA area.
   •  Risk-on mood offsets weaker USD/subdued US bond yields. 
   •  Traders eyeing today’s US CPI print for some fresh impetus.

Gold struggled to build on overnight rebound from the very important 200-day SMA region and was now seen oscillating in a narrow range, just above $1310 level.

A modest US Dollar profit-taking slide on Wednesday, further weighed by softer-than-expected US PPI print, benefitted dollar-denominated commodities and triggered a short-covering bounce from a trend-changing moving average support.

The up-move, however, lacked any strong follow-through on Thursday, with a combination of diverging forces doing little to provide any fresh impetus and leading to a range-bounce price action through the early European session. 

The prevalent risk-on mood, as depicted by strong gains across European equity markets, dented the commodity's safe-haven appeal and capped any additional gains. Meanwhile, the downside remained cushioned amid subdued US Treasury bond yields and retracing USD.

Investors now look forward to the latest US inflation figures, which might influence Fed rate hike expectations and eventually derive demand for the non-yielding yellow metal.

Technical levels to watch

Weakness back below the $1310 area might continue to find support near the $1306-05 region (200-day SMA), which if broken might turn the commodity vulnerable to break below $1300 mark and head towards testing $1294-93 support area. 

On the upside, the $1315 region, closely followed by $1318 zone, remains an immediate hurdle to conquer, above which the metal is likely to aim towards testing 100-day SMA hurdle near the $1325 region.
 

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