Gold rebounds after hitting fresh multi-month lows

Gold managed to recover early lost ground to nearly 10-month low and has now moved into positive territory during early European session. 

Currently trading at session peak around $1275, broad based greenback retracement, as measured by the overall US Dollar Index, was seen extending support to dollar-denominated commodities and contributing to the metal's recovery on Thursday following its worst monthly performance since June 2013. 

The precious metal on Wednesday extended its bearish slide after OPEC agreed to cut its crude oil production, which boosted investors' appetite for riskier asset and weighed on perceived safe-haven assets - like gold. Adding to this, Wednesday's ADP report, showing US private sector added 216K new jobs in November, has now raised expectations for Friday's official jobs report. Moreover, upbeat ADP report added to the optimistic view for a stronger US economic growth in 2017, which should lead to faster-than-expected Fed rate-hikes, and exerted further selling pressure around the non-yielding yellow metal. 

Later during the day, the US ISM manufacturing PMI and weekly jobless claims data might provide some impetus for short-term traders ahead of Friday’s closely watched non-farm payrolls data. 

Technical levels to watch

Immediate upside resistance is now pegged near $1183-85 region above which a fresh bout of short-covering could lift the metal towards $1193-95 resistance area. On the downside, weakness back below $1172-70 zone seems to drag the commodity back towards $1160 support area below which the metal seems all set to head towards $1150 important support.