Gold extends overnight recovery move from 7-week lows

Gold built on overnight steady recovery move from 7-week lows and is currently placed closer to session tops, near the $1276 region.

The precious metal halted its recent slump and has now recovered back above 100-day SMA. A modest retracement in the US Treasury bond yields was seen pressuring the US Dollar and eventually benefitting dollar-denominated commodities - like gold.

Adding to this, market speculations that the US President Donald Trump's choice for the next Fed Chair might be less hawkish than previously thought provided an additional boost to the non-yielding yellow metal. 

Further gains, however, remains capped amid prevalent bullish sentiment around equity markets, which tends to dent demand for traditional safe-haven assets, including gold. 

Market participants will now watch for today's important US macro data - ADP report on private sector employment and ISM non-manufacturing PMI, along with the Fed Chair Janet Yellen's speech for some fresh impetus. 

The key focus, however, would remain on Friday's keenly watched NFP data, which could act as an important catalyst determining the next leg of directional move for the commodity. 

Technical levels to watch

A follow through buying interest beyond $1279 level has the potential to continue lifting the metal towards $1284 horizontal level en-route its next resistance near the $1287 region. 

On the flip side, weakness back below the $1273-72 region (100-day SMA), leading to a subsequent break below $1270 support, would turn the commodity to extend its near-term downward trajectory towards $1262 level ahead of $1257 support.