Gold slips back to $1320 level as focus shifts to US inflation figures

   •  A modest USD rebound prompts some fresh selling.
   •  An uptick in the US bond yields adds to the pressure. 
   •  Today’s US inflation figures to provide a fresh directional impetus.

Gold once again met with some fresh supply near the $1325 region and has now retreated back below $1320 level. 

A modest US Dollar rebound, backed by an uptick in the US Treasury bond yields, is turning out to be one of the key factors prompting some fresh selling around dollar-denominated commodities - like gold. 

Adding to this, easing concerns of rising inflationary pressure in the US further dampened the commodity's demand as a hedge against inflation and largely offset fading expectations over aggressive Fed rate hikes in 2018. 

Meanwhile, the precious metal has been finding some decent support near $1315 level but the recovery move once again got sold into near the $1325 area, clearly suggesting indecision ahead of today's key event risk. 

Investors look forward to the key US inflation figures, due later in the day, for fresh clues over the Fed's near-term monetary policy outlook, which would eventually determine the next leg of the directional move for the non-yielding yellow metal. 

Technical levels to watch

The $1315 level might continue to limit immediate downside, which if broken is likely to accelerate the fall towards 100-day SMA support near the $1302 region. On the upside, the $1325 area remains an immediate strong hurdle, which if cleared might trigger a short-covering bounce towards $1332-33 supply zone en-route $1340 barrier.