•  A modest USD profit-taking slide prompts short-covering from an important support.
   •  Weaker equities underpin safe-haven demand and provide an additional boost.
   •  US PPI eyed for some trading impetus ahead of Thursday’s more relevant CPI print.

Gold[1] once again managed to bounce off the very important 200-day SMA and has now recovered a major part of its early slide to 1-week lows.

A modest US Dollar[2] profit-taking slide, especially after the recent relentless rally to multi-month tops, was seen as one of the key factors behind the precious metal's rebound from an intraday low level of $1304.32. A weaker greenback tends to benefit dollar-denominated commodities - like gold.

This coupled with a mildly negative tone around European equity markets provided an additional boost to the precious metal's safe-haven appeal and remained supportive of the goodish rebound back above the $1310 level. 

However, a strong follow-through uptick in the US Treasury bond yields[3], amid rising speculations that the Fed might be forced to opt for a steeper monetary policy tightening cycle, kept a lid on any further up-move for the non-yielding yellow metal.

On the economic data[4] front, the release of US Producer Price Index (PPI) for April would now be looked upon for some impetus ahead of the more relevant consumer inflation figures, due on Thursday.

Technical levels to watch

Any subsequent recovery beyond $1314-16 immediate resistance is likely to get extended and might assist the commodity to aim towards testing 100-day SMA barrier near the $1325 region.

On the flip side, $1306-05 zone (200-DMA) might continue to protect the immediate downside, which if broken might turn the metal vulnerable to break below the...

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