Gold spikes to $1150 and retreats

Gold was seen building on to tepid recovery move and gained fresh traction during early European. The yellow metal spiked to a 9-day peak level of $1150 before quickly retracing from highs to currently trade around $1144 region. 

A mixed US Dollar performance, against its major counterparts, was seen assisting the precious metal's recovery on Tuesday. Adding to this, a mildly cautious sentiment around equity markets was also seen supporting the yellow metal's safe-haven appeal and collaborated to a sharp spike in the past hour. 

However, the recovery momentum lacked conviction amid lack of fresh fundamental drivers during the holiday season. Hence, it would be interesting to see if the recovery is backed by actual buying or is just a stop-run. 

Traders on Tuesday will focus on the release of CB's consumer confidence index for December, which would provide some impetus for the greenback and eventually drive dollar-denominated commodities - like gold.

Technical levels to watch

A follow through buying interest above $1150 resistance should help additional recovery towards $1158-60 horizontal area above which a fresh bout of short-covering could lift the metal back towards $1170-75 strong resistance area. On the downside, weakness back below $1140-38 support is likely to drag the commodity back towards $1133 support area. Slide below $1133 level might continue to find support near $1127-25 region, which if broken would turn it vulnerable to extend its near-term downward trajectory towards $1110 support, en-route $1100 psychological mark.