Gold trims tepid recovery gains, eyeing US data for fresh impetus

Having posted a session high near $1232 level, gold lost the recovery momentum and has now trimmed some of its gains ahead of US economic docket.

Currently trading around $1225 level, the yellow metal staged a tepid recovery after hitting a five-month low on Monday and from near-term oversold conditions amid broad based greenback retracement. A weaker greenback tends to benefit dollar-denominated commodities and was the sole driver of the metal's initial leg of recovery move on Tuesday. 

The recovery momentum, however, lost steam as market expectations for an imminent Fed rate-hike action in December continues to weigh on non-yielding commodity, gold. 

Tuesday's US economic docket, featuring the release of monthly retail sales, Empire State Manufacturing Index and import prices, will be looked upon for short-term momentum play. Meanwhile, the broader trend would remain dependent on Fed rate-hike expectations, which would be a key driver for the overall US Dollar Index and gold prices.

Technical levels to watch

Immediate support on the downside is pegged at $1220 below which the metal is likely to head back towards Monday's low support near $1210 region before sliding further towards the very important $1200 psychological mark. On the upside, $1230-32 area (session peak) now becomes immediate barrier, which if cleared has the potential to lift the commodity immediately towards $1240 en-route its next major hurdle near $1250 region.