Gold jumps to $1327 as risk-aversion grips global markets

With risk aversion taking front seat during early European trading session, Gold has managed to attract some safe-haven flows and is now building on to Thursday's recovery momentum.

Currently trading around $1326-27 area, the precious metal has nearly erased all of its losses recorded in the previous two trading session. The metal on Thursday touched a 6-day low level of $1316 immediately after the second quarter US GDP was revised higher to show an annualized economic growth of 1.4% before staging a turnaround amid sharp slide in US equity markets, led by worries over Deutsche Bank's performance, which boosted demand for traditional safe-haven assets. 

On Friday, Deutsche Bank uncertainty continues to weigh on investors sentiment and is further boosting the investment appeal of the precious metal. Moreover, renewed weakness in crude oil price is clearly suggesting that the markets have digested global optimism led by late Wednesday's new over production curbs by major oil producers. 

Focus now shifts to a slew of US economic releases, which include - the Fed's preferred inflation measure, Core PCE Price Index, Personal Income & Spending data, Chicago PMI and Revised UoM Consumer Sentiment, and might provide some impetus for short-term traders. 

Technical levels to watch
 
On a sustained move above $1327, the metal seems to aim back towards testing 50-day SMA resistance near $1332 region above which a fresh bout of short-covering could lift it back towards $1337-38 strong horizontal resistance.

Meanwhile on the downside, $1320 now becomes immediate support, which if broken would negate any near-term bullish bias and drag the commodity below weekly low support ear $1316 level, towards testing its next major support near $1310 area, also coinciding with 100-day SMA.