Gold building on last week's recovery move

Gold caught fresh bids on Tuesday and was seen building on to last week's recovery gains that helped to snap post-US election losing streak for seven consecutive weeks. 

Currently trading around $1156 region, a surprisingly positive Chinese manufacturing PMI eased concerns of an economic slowdown in the world's second largest economy and provided initial boost to the precious metal. Moreover, a minor US Dollar retracement from session peak extended additional support to dollar-denominated commodities - like gold. 

However, improving investor risk appetite, as depicted by buoyant sentiment surrounding equity markets, has failed to benefit the metal's safe-haven appeal. This coupled with expectations of faster Fed rate-tightening cycle might contribute towards restricting further upside for the non-yielding yellow metal, just below two-week high touched last week. 

Later during NA session, the release of US ISM manufacturing PMI might influence the greenback and eventually provide some impetus for gold prices. However, key event risk for the metal's near-term recovery trend would be Friday's US monthly jobs report, which would determine the metal's safe-haven demand and determine the next leg of directional move.

Technical levels to watch

A follow through buying interest above Friday's swing high resistance near $1163 is likely to accelerate the move towards $1170 resistance above which a fresh bout of short-covering has the potential to lift the commodity further towards its next major hurdle near $1183-85 region. On the downside, $1150 region now seems to have emerged as immediate resistance, which if broken might expose $1140 support area ahead of $1130-25 strong support.