Gold surrenders early gains, weighed down by a modest USD rebound

   •  USD selling abates and prompts some fresh selling. 
   •  Fading safe-haven demand adds to the downward pressure.
   •  Sliding US bond yields help limit further downside.

Gold surrendered a major part of its daily gains to multi-day tops and is currently placed in the neutral territory, around $1223 area.

Bulls struggled to preserve early up-move, with a modest US Dollar recovery prompting some selling around dollar-denominated commodities - like gold. Adding to this, a goodish rebound in European equity markets was further seen weighing on traditional safe-haven assets and collaborated to the precious metal's retracement from higher levels. 

Meanwhile, a weaker tone around the US Treasury bond yields, though off Asian session lows, extended some support to the non-yielding yellow metal and might help limit any deeper corrective slide, at least for the time being.

Traders now look forward to the release of US ISM non-manufacturing PMI in order to grab some short-term opportunities. The key focus, however, would be on Friday's keenly watched US monthly jobs report (NFP), which would help determine the next leg of directional move.

Technical levels to watch

A follow-through retracement below $1320 level is likely to accelerate the fall towards $1316-15 support before the metal eventually drops back to $1307-06 support area. On the upside, immediate resistance is pegged near the $1328 level, above which the momentum could get extended towards $1333-35 region en-route $1341-42 hurdle.