Gold bounces from two-week lows, holding recovery gains at $1340

Gold extended its retracement from a two-week low level of $1327 touched earlier during Asian trading session and rose to $1344 before retracing a bit to currently trade around $1340 level. 

Continuous improvement in global risk appetite, as depicted by strong rally in US equity markets, dented safe-haven appeal of the yellow metal and triggered a sell-off on Tuesday for second consecutive day. Adding to the upbeat investor sentiment, easing political uncertainty in the UK also contributed to the precious metal's sharp declines in the past couple of day. 

On Wednesday, cautious sentiment ahead of the much awaited BOE monetary policy meeting on Thursday drove investors back to the perceived safe-haven assets and provided the some respite to bulls. Investors will also pay close attention to the key quarterly Chinese GDP data that could resurface worries of a global economic slowdown and trigger strong buying interest around the precious metal.

Technical levels to watch

From current levels, previous support near $1345-46 region now seems to act as immediate resistance above which the commodity seems to make a move back towards recent closing highs resistance near $1375.

On the flip side, weakness below $1325, leading to a decisive break below 20-day SMA support near $1320, is likely to extend the metal's near-term corrective move back towards post-Brexit corrective lows support near $1305-1300 psychological mark.