Gold recovers, but bulls cautious

• Spot gold trades at its highest since last Wednesday.
• Physical demand from Asian jewelers backed the early advance.

Gold prices are up mid-US session, with spot trading around $1,323.81 a troy ounce, a level last seen on Wednesday. The bright metal traded as high as 1,236.56, but eased amid an on-hold greenback, despite the better mood in global equities and a continued advance in Treasury yields.

The commodity´s surged at the beginning was backed by increased physical demand from Asian buyers, and a downward corrective movement in the greenback. Nevertheless, bulls are having a hard time to push it higher ahead of the US inflation report to be released next Wednesday.

Technical outlook

Spot is advancing above the 38.2% retracement of the December/January rally at 1,316.30, although in the daily chart, the metal is well below a bearish 20 DMA, which converges with the 23.6% retracement of the same rally, while technical indicators are losing partially their upward strength well below their mid-lines, suggesting limited buying interest. Below the mentioned 1,316.30 Fibonacci level, the next support is last week's low at 1,306.90. Above the daily high, on the other hand, the next resistance comes at 1,335.30, the next Fibonacci resistance.