Gold recovers further from 5-week lows, back above $1320 level

   •  Higher than expected US GDP does little to prompt fresh selling.
   •  Retracing US bond yields supportive of the short-covering bounce.

Gold held on to its modest recovery gains post-US GDP print and is now looking to build on its move back above 100-day SMA support turned resistance near the $1320 region.

The commodity stalled its recent downfall and found some decent support near $1315 level on Friday amid a modest retracement in the US Treasury bond yields, which was seen underpinning demand for the non-yielding yellow metal. 

However, a stronger than expected US Q1 GDP growth figure helped the US Dollar to preserve its strong gains to 3-1/2 month highs and might keep a lid on any strong up-move for dollar-denominated commodities - like gold. 

This coupled with improving investors' risk appetite, as depicted by buoyant trading sentiment around equity markets and which tends to weigh on traditional safe-haven assets, might further collaborate towards capping any meaningful up-move. 

From a technical perspective, yesterday's break below 100-day SMA, for the first time since late December, indicated a near-term bearish breakdown. Hence, it would be prudent to wait for a strong follow-through buying interest before confirming that the commodity might have bottomed out in the near-term.

Technical levels to watch

Immediate resistance is pegged near the $1324-25 region, above which the recovery move could get extended towards $1330-32 supply zone. On the flip side, $1316 level now becomes an immediate support to defend, which if broken is likely to accelerate the fall towards $1310 horizontal support en-route the very important 200-day SMA support near the $1302-1300 region.