Gold oscillates in a range below 4-month highs

   •  Goodish USD rebound prompts some selling. 
   •  Further weighed down by fading safe-haven demand. 
   •  US inflation figures awaited for fresh directional impetus. 

Gold lacked any firm directional bias and was seen oscillating within a narrow trading range, below $1320 level, through the early European session. 

After yesterday's sharp upswing to near 4-month highs and a subsequent retracement, the precious metal now seems to have entered a consolidation phase and was being capped by a goodish US Dollar rebound. 

The USD reversed previous session's steep declines, led by news reports that China is considering slowing or halting its purchases of the US Treasuries, and was eventually seen weighing on dollar-denominated commodities - like gold.

Adding to this, improvement in investors' appetite for riskier assets, as depicted by a positive trading sentiment around equity markets, further dented the precious metal's safe-haven appeal and did little to provide any fresh bullish impetus. 

Traders now look forward to the US economic docket, featuring the release of PPI print and the usual weekly jobless claims, for some short-term trading opportunities. 

The key focus, however, would be on Friday's consumer inflation figures and monthly retail sales data, which might influence Fed rate hike expectations and eventually provide directional impetus for the non-yielding yellow metal. 

Technical levels to watch

Immediate resistance is seen near $1322 horizontal level, above which the commodity is likely to surpass $1327-28 barrier (yesterday's swing high) and head towards testing its next major hurdle near the $1333 region.

On the flip side, $1312 level is likely to protect the immediate downside, which if broken might accelerate the slide towards $1307 intermediate support en-route the key $1300 handle.