Gold hovering around 3-week highs, eyeing ECB for fresh impetus

After Wednesday's minor pull-back from a three-week high level, Gold ticked higher but remained confined in a narrow trading band on Thursday.

Currently trading around $1348, the yellow metal seems to consolidate following a sharp recovery from sub-$1300 level, a two-month low touched in the previous week. The prevalent cautious sentiment in equity markets is boosting the safe-haven appeal of the precious metal.

Moreover, a broadly weaker greenback, as measured by the US Dollar Index, has been extending support to dollar-denominated commodities - like gold. 

The up-move, however, was restricted below 3-week highs as investors now await for the ECB monetary policy decision, which is likely to infuse volatility in FX market and provide fresh impetus for gold prices.

Technical levels to watch

On the upside, $1355 level seems to act as immediate hurdle, which if cleared now seems to pave way for a retest of post-Brexit swing high resistance near $1375 area. On the flip side, sustained weakness below session lows support near $1342-40 region is likely to exert further selling pressure and drag the metal back towards $1330 support.