Gold reverses Thursday’s tepid recovery gains

After failing to extend its rebound and facing rejection at the very important 200-day SMA, Gold retreated on Friday and has now reversed Thursday's tepid recovery gains. 

Currently trading around $1256 level, renewed buying interest around the greenback, as measured by the overall US Dollar Index, is weighing on dollar-denominated commodities - like gold. Increasing odds of an eventual Fed rate-hike decision by the end of 2016 has been the key factor driving the greenback higher and restricting any swift recovery for the non-yielding yellow metal.

Meanwhile, revival in investor risk-appetite, following upbeat Chinese inflation data, is further denting the precious metal's safe-haven demand and has led to near-term consolidative phase following a sharp slide in the previous two week and drop below 200-day SMA strong support. 

Today's US economic releases, which include - monthly retail sales, PPI and Prelim UoM Consumer Sentiment, following by the Fed Chair Janet Yellen's speech would provide fresh impetus for the commodity's next leg of movement during US trading session.

Technical levels to watch

From current levels, $1252-50 area seems to protect immediate downside below which the commodity is likely to head back towards last week's swing low support near $1241 level. Meanwhile on the upside, $1262-63 (200-day SMA) remains immediate strong hurdle, which if conquered is likely to lift the metal beyond $1270 resistance towards its next major barrier near $1275-77 area.