Gold hangs near 2-week lows, US CPI in focus

Gold remained under some selling pressure through early Asian session on Thursday and fell to near 2-week lows, albeit has managed to pare some of its early losses.

Against the back drop of decline in geopolitical uncertainty, fading safe-haven demand had been weighing on the precious metal since the beginning of this week. This coupled with a smart US Dollar recovery further undermined demand for dollar-denominated commodities - like gold.

The greenback's strong recovery move got an additional boost from news that the US tax reform guidance would be announced by September 25. Renewed optimism over the US President Donald Trump's pro-growth economic agenda dragged the yellow metal farther away from one-year tops touched last Friday.

Investors now seemed to have turned cautious and hence, a subdued action around global equity markets prevented deeper losses, at least for the time being.

The incoming US macro data, including the latest US CPI print, due for release later during the NA session, and Friday's monthly retail sales data, would influence Fed rate hike expectations and eventually provide near-term directional impetus for the non-yielding commodity.

Technical levels to watch

Immediate resistance is seen near $1326 level, which is closely followed by resistance near $1332 area. Momentum beyond the mentioned hurdles could get extended towards $1340 horizontal level en-route the $1348-50 region.

On the flip side, sustained weakness below $1320-19 area would turn the metal vulnerable to extend its near-term corrective slide initially towards $1314 intermediate level ahead of an important support near the $1308 region.

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