Gold bounces-off 20-DMA, tests $ 1330 ahead of BOE

The bears loosened their grip ahead of the BOE decision, allowing a minor-recovery in the gold prices towards 1330 levels.

Gold recovers losses, BOE in focus

Currently, gold trades -1.24% lower at $ 1329.03, extending recovery lows struck near 20-DMA support of 1324.31. Gold found some support from subdued trading activity seen around the US dollar and staged a minor-bounce heading into the BOE monetary policy outcome, with investors flocking to the safe-haven expectant of huge volatility following the BOE events.

However, the recovery remains fragile in wake of rallying European equities, as markets expect the BOE to slash rates this Thursday on the back of the Brexit fallout. Should the BOE cut the rates, the USD bulls will flex their muscles and rebound sharply higher across the board, knocking-off gold back towards 20-DMA.

Gold Technical Levels                                   

The metal has an immediate resistance at 1345.84 (5-DMA) and 1353.33 (1h 200-SMA). Meanwhile, the support stands at 1324.31 (20-DMA) below which doors could open for 1320 (round number).