Gold recovers early lost ground, back closer to 3-1/2-month highs

   •  Goodish USD rebound prompts some early profit-taking.
   •  Fading safe-haven demand adds to the downward pressure.
   •  Sliding US bond yields lend immediate support ahead of FOMC minutes.

Gold retreated after hitting a 3-1/2 month high and dropped to an intraday low near $1312, albeit has managed to recover majority of its lost ground.

The US Dollar recovered from its lows and prompted traders to take some profits off dollar-denominated commodities - like gold amid near-term overbought conditions. 

Adding to this, the prevalent risk-on environment was also seen weighing on traditional safe-haven assets and further collaborated to the precious metal's modest corrective slide.

However, a weaker tone around the US Treasury bond yields, which tends to boost demand for the non-yielding metal, helped limit deeper losses and rebound from lower levels. 

Against the backdrop of recent bullish breakthrough technically important daily moving averages (100 & 200-day) and a sustained close above $1300 mark, today's pull-back might still be categorized as consolidation phase and the yellow metal still seems poised to extend its near-term upward trajectory.

Having said that, today's FOMC meeting minutes, which would be looked upon for the central bank's monetary policy outlook for 2018, would play a crucial role in determining the commodity's next leg of directional move.

Technical levels to watch

Immediate resistance remains near the $1325-26 region, above which spot prices could rise towards $1331-33 hurdle en-route $1348-50 strong resistance. On the flip side, weakness below $1312-11 area (session low) could prompt some additional profit-taking slide back towards $1303 level ahead of $1297 support.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.