Gold recovers further from 1-month lows, moves back above $1715 level

Gold added to its intraday gains and refreshed daily tops, around the $1718 region during the early North American session.

The precious metal managed to attract some dip-buying near the 50-day SMA support, around the $1690 region and snapped two consecutive days of losing streak. The yellow metal recovered a part of the previous day's sharp intraday slide to near one-month lows and was being supported by a combination of factors.

Concerns over a further escalation in tensions between the world's two largest economies overshadowed the recent optimism about a sharp V-shaped global economic recovery. This, in turn, led to a modest pullback in the global equity markets and boosted demand for traditional safe-haven assets, including gold.

Meanwhile, the latest leg of a sudden pick up over the past hour or so was led by some aggressive US dollar selling, which tends to underpin demand for the dollar-denominated commodity. The greenback struggled to preserve its early gains, instead witnessed some selling amid the post-ECB buying around the shared currency.

From a technical perspective, the commodity on Wednesday broke below a multi-week-old ascending trend-channel support near the $1700 mark, though showed some resilience at lower levels. This makes it prudent to wait for some strong follow-through buying before positioning for any further appreciating move.

Market participants now start repositioning for Friday's release of the closely watched US monthly jobs report, popularly known as NFP. The employment details will play a key role in influencing the near-term USD price dynamics and help determine the commodity's next leg of a directional move.

Technical levels to watch