Gold placed at session tops near $1257 level

Gold staged a goodish recovery during European session on Friday and moved away from three-week lows near $1251 region.

Currently placed at session tops, around $1257 level, the precious metal was seen benefitting from a mildly softer tone around the greenback. With markets looking past Wednesday's hawkish Fed decision, the US Dollar drifted lower on Friday seems to have prompted some short-covering move around the dollar-denominated commodity, gold.

It, however, remains to be seen if the current recovery move is sustainable or is being utilized to initiate some fresh short positions amid improving investors' appetite for riskier assets - like equities, which tends to drive flows away from traditional safe-haven assets - like gold.

Next on tap would be the US economic docket, featuring the release of housing market data and Prelim UoM Consumer Sentiment index for June, which would be looked upon to grab some short-term trading opportunities.

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Technical levels to watch

Any further recovery is likely to confront resistance at 50-day SMA near $1260 region, above which a fresh bout of short-covering could lift the commodity back towards $1266-67 horizontal zone ahead of $1272-74 resistance area.

On the downside, $1254 level now becomes immediate support to defend, which if broken is likely to accelerate the slide below $1250 level towards 100-day SMA support near $1246-45 region.