Gold in search of a firm direction, stuck in a range below $1320

   •  Struggles to build on overnight recovery move.
   •  Risk-off mood/weaker USD lending support.
   •  Fed rate hike expectations seemed to cap gains.

Gold struggled to build on overnight sharp recovery move from 2-month lows and seesawed between tepid gains/minor losses, within a narrow trading range below $1320 level. 

A combination of diverging forces failed to provide any fresh impetus and led to a range-bound/subdued price-action through the early European session. Fears about a global trade war after Trump imposed hefty tariffs on imported steel and aluminium triggered a fresh wave of risk-aversion trade and revived the precious metal's safe-haven appeal.

Meanwhile, Trump's harsh trade tariffs also halted the US Dollar's week-long strong up-move and further underpinned demand for dollar-denominated commodities - like gold. 

However, a goodish pickup in the US Treasury bond yields, amid firming expectations that the Fed might opt for a faster monetary policy tightening cycle, kept a lid on any further up-move for the non-yielding yellow metal. 

Hence, it would be prudent to wait for a strong follow-through buying interest before confirming that the commodity might have bottomed out in the near-term and is set to resume with its prior appreciating move. 

Technical levels to watch

Sustained weakness back below $1315 level could drag the commodity back towards $1307-06 support level en-route 100-day SMA support near the key $1300 psychological mark. 

On the upside, a convincing move beyond $1321-22 immediate hurdle might prompt some additional short-covering move and lift the metal back towards $1330 support zone ahead of $1335 resistance.