Gold gives-up part of tepid recovery gains ahead of US opening

Heading into the NY trading session, Gold trimmed some its early recovery gains and has now retraced back to $1313 level.

Having dropped for eight sessions in the previous nine to finish with a loss of nearly 2% in the previous week, the precious metal staged a recovery on the first trading day of the week. The recovery was primarily driven by a broadly weaker greenback, which supported demand for dollar-denominated commodities - like gold. 

The recovery, however, lacked momentum as the prevalent upbeat sentiment in equity markets is driving investors away from perceived safe-haven assets and capped further recovery. Ahead of two major central bank monetary policy meetings this week, divided market expectations over the Fed and BOJ next monetary policy action has led to an uncertain environment, which has not been supportive for the yellow metal. 

This week's central bank decisions and (or) their commentary would influence demand for the US Dollar and trigger a fresh bout of volatility in the FX market, eventually providing fresh impetus for the precious metal's next leg of directional move. 

Technical levels to watch

Immediate downside support is pegged at $1310 level, which is closely followed by 100-day SMA strong support near $1305 region. A clear break below 100-day SMA would open room for further depreciating move in the near-term. Resistance on the upside is seen at $1318 and $1322 levels above which the metal is likely to rise towards $1330 strong resistance.