Gold consolidating Tuesday’s recovery back above 200-DMA

Gold traded in a narrow range on Wednesday, consolidating yesterday's strong up-move back above the very important 200-day SMA.

Currently trading around $1274 region, a broad based greenback retracement helped the yellow metal to touch a three-week high near $1277 level. In absence of any major economic releases, the greenback has struggled to extend its recent bullish traction, with the overall US Dollar Index extending its corrective slide from eight-month highs and is benefitting dollar-denominated commodities - like gold. 

Meanwhile, downbeat sentiment surrounding European equity markets is also supporting the precious metal's safe-haven appeal. However, increasing market bets for an eventual Fed rate-hike action by the end of this year might restrict any strong recovery for the non-yielding commodity, gold. 

This week's key macro releases - durable goods orders and quarterly GDP print, from the US would drive investors expectations over the timing of next Fed rate-hike action and provide fresh impetus for the metal's next leg of directional move.

Technical levels to watch

Immediate downside support is now pegged at 200-day SMA near $1270 region, which if broken is likely to drag the commodity initially towards $1264 intermediate support and eventually towards weekly lows support near $1260 level. Meanwhile on the upside, a follow through buying interest above 3-week highs resistance near $1277 seems to pave way for an immediate up-move towards $1290-92 resistance en-route $1298-$1300 psychological mark.