Gold sits at session tops, around $1330 level ahead of US data

   •  Renewed USD weakness helps regain some traction.
   •  Surging US bond yields capping additional gains.
   •  US economic data eyed for trading opportunities.

After an initial dip to fresh weekly lows, gold staged a modest recovery to $1330 level and recovered part of previous session's steep losses. 

The precious metal stalled its corrective slide to the lowest level in nearly a week and was now supported by some renewed greenback weakness. In fact, the US Dollar Index struggled to build on overnight rebound from 3-year lows and eventually benefitted dollar-denominated commodities - like gold. 

However, a follow-through pickup in the US Treasury bond yields, backed by growing market conviction that Fed would deliver at least three rate hikes in 2018, was seen keeping a lid on any additional gains for the non-yielding yellow metal.

The Federal Reserve's Beige Book, released on Wednesday, provided anecdotal evidence that the US economy is strong enough to withstand multiple rate hikes in 2018 and triggered a fresh leg of an upsurge in the US bond yields. 

Investors now look forward to upcoming US economic releases - housing market data, Philly Fed Manufacturing Index and initial weekly jobless claims, in order to grab some short-term trading opportunities. 

Technical levels to watch

Momentum beyond $1332 level now seems to accelerate the up-move back towards $1340 supply zone en-route $1345 barrier. On the flip side, $1324 level might continue to protect the immediate downside, which if broken might turn the metal vulnerable to correct further towards $1312 horizontal support.
 

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