Gold bounces off lows, still in red below $1330 level

   •  Easing trade-war fears/risk-on moods continue to exert downward pressure.
   •  A modest USD uptick/pickup in the US bond yields add to the weaker tone.
   •  Short-covering helps bounce off lows, but the outlook remains negative. 

Gold held on to its weaker tone through the mid-European session, albeit has managed to pare some of its early losses to weekly lows.

Wednesday's comments by the US President Donald Trump's economic adviser Larry Kudlow eased concerns of a full-blown trade war between the world's two-largest economies and helped revive investors' appetite for riskier assets. 

The spill-over risk-on mood, as depicted by strong gains across global equity markets prompted investors to dump perceived safe-haven assets and continued exerting downward pressure on the precious metal on Thursday.

This coupled with a modest US Dollar uptick and a goodish pickup in the US Treasury bond yields further collaborated to the offered tone surrounding the dollar-denominated/non-yielding yellow metal.

The selling pressure, however, seems to have abated a bit, at least for the time being, with the commodity managing to bounce off an intraday low near $1324.50 level. The rebound lacked any obvious trigger and could be solely attributed to some short-covering. Hence, it would be prudent to wait for a strong follow-through buying before positioning for any further recovery in the near-term.

Technical levels to watch

The $1325-24 area might continue to act as an immediate support, which if broken could accelerate the downfall and drag the commodity further towards 100-day SMA support near the $1312 region.

On the upside, $1332 level now seems to act as an immediate resistance, above which the commodity seems all set to head back towards challenging the $1340-41 supply zone en-route $1348 hurdle.