Gold erases BOJ-led losses, jumps to 5-day high at $1320

Having dropped to weekly low in the aftermath of BOJ announcement, Gold recovered all of its lost ground and surged to hit a fresh session high.

Currently trading around $1318 level, the yellow metal traded higher for the third consecutive session amid diminishing prospects of an immediate Fed rate-hike action. The US central bank is scheduled to announce its monetary policy decision later during NY trading session. 

Earlier during Asian session, the previous metal came under renewed selling pressure after BOJ left its key interest rates unchanged at -0.1%. The announcement disappointed markets expecting the central bank to take interest rates farther into negative territory. However, the metal attracted fresh buying interest at lower level as the central bank showed strong commitment to continue with aggressive quantitative easing measures to step up its fight against deflation and achieve 2% inflation target as soon as possible.

Traders will remain focused on Fed announcement, which would determine the near-term trajectory for the US Dollar and eventually drive dollar-denominated commodities - like gold.

Technical levels to watch

A follow through buying interest above $1320 seems to provide an additional boost to the metal immediately towards $1330 resistance above which a fresh leg of up-move should open room for continuation of the upward trajectory towards its next major resistance near $1350 region in the near-term.

On the flip side, weakness back below $1315 immediate support, leading to a subsequent drop below $1310, might now turn the commodity vulnerable to break below 100-day SMA support near $1305 region and head towards testing $1290 support area.