Gold stages a minor recovery as USD retreats from 14-year high

Having dropped to $1126 in the previous session, Gold staged a goodish recovery and edged further higher on Wednesday as the US Dollar retreated from fresh 14-year highs. 

Currently trading around $1137 level, broad based greenback retracement helped the precious metal to reverse majority of Tuesday's downslide. The recovery, however, lacked momentum as market expectations of further Fed rate-hike actions in 2017 might continue to weigh on the non-yielding yellow metal. 

Moreover, increasing prospects of faster US economic growth, led by aggressive fiscal policies by Trump administration, might continue to underpin the greenback and dent any strong demand for dollar-denominated commodities - like gold. 

Meanwhile, markets seemed to have little appetite for traditional safe-haven assets amid prevalent upbeat sentiment around equity market, as depicted by fresh record levels for major US equity indices.  

Looking at the broader picture, the metal's recent price action could be categorized as a consolidation phase, following post-US election and hawkish FOMC slump of around 16.0% in the past one month. 

Technical levels to watch

From current levels, $1140 level is likely to act as immediate resistance above which a bout of short-covering could lift the commodity above $1150 resistance towards $1158-60 strong hurdle. On the downside, weakness back below $1130 might continue to find support near $1125 level, which if broken decisively now seems to accelerate the slide towards $1110 support, en-route $1100 psychological mark.