Gold recovery gains momentum, jumps to session high at $1343

After an initial dip to $1335, Gold has managed to recover its lost ground and is now building on to Monday's rebound from 9-day low to currently trade at session high around $1343 region.

Amid cautious trade on Monday, a broad based greenback retracement helped the yellow metal to bounce from 50-day SMA support. However, reviving hopes of an eventual Fed rate-hike in 2016 kept recovery under check, with the precious metal settling lower for second consecutive day.

Recent price action within a broader trading range constitutes towards formation of a rectangular chart pattern on daily chart. Hence, further recovery beyond 20-day SMA resistance near $1345 region would reaffirm continuation of range-bound move in the near-term.

Technical levels to watch

On the immediate upside, 20-day SMA at $1345 region remains immediate resistance to watch for, above which the recovery momentum is likely to get extended immediately towards $1350 level en-route the top end of recent trading range resistance near $1356-57 area.

Alternatively, failure to move past 20-day SMA resistance, and a subsequent drop back below $1335 immediate support, seems to drag the metal back towards Monday lows support near $1330 level. A follow through selling pressure would confirm a break down and trigger a fresh leg of downfall that is likely to drag the commodity towards July monthly lows support near $1315-10 region.