Gold treading water around $1140

Gold reversed majority of its tepid recovery gains to session peak level of $1144.50 and is now trading in neutral territory amid broad based greenback strength.

Currently trading around $1139 region, resurgent greenback buying interest, with the overall US Dollar Index heading back towards 14-year highs, is seen denting demand for dollar-denominated commodities and hindering the precious metal's recovery from 10-1/2 month low touched on Dec. 15. 

Meanwhile, mixed sentiment surrounding European equity market has failed to assist the yellow metal's safe-haven demand but seems to have limited immediate downslide for the time being. 

Additionally, recovery in the US Treasury bond yields, on growing prospects of faster US economic growth and higher interest rates, is further driving flows away from the non-yielding commodity. 

Incoming US economic data would continue to drive investor expectations over the timing of next Fed rate-hike action and determine the next leg of directional move for gold prices. Hence, market attention now shifts to one of the most important US economic indicators, monthly jobs report (NFP) scheduled next week on Friday. 

Technical levels to watch

Weakness below session low support near $1137 level is likely to get extended towards $1134-33 support area below which the commodity seems to head back towards $1127 support area. On the upside, momentum above session peak resistance near $1144-45 region might continue to face resistance near two-week high level of  $1150, which if cleared might trigger a fresh bout of short-covering towards $1165 horizontal resistance, with some intermediate resistance near $1159-60 zone.