Gold stages a strong recovery to $1317

Gold staged a strong recovery on the first trading day of the week and has now erased all of its Friday's losses on the back of upbeat US CPI print. 

Currently trading around $1317 level, diminishing prospects of an eventual Fed rate-hike action at its meeting this week is weighing on the greenback and boosting demand for dollar-denominated commodities - like gold.

Moreover, a bout of short-covering could also be one of the factors contributing to the yellow metal's recovery on Monday, from the vicinity of 100-day SMA, ahead of this week's key event risks, major central banks (BOJ and the Fed) monetary policy decision announcements on Wednesday.

Technical levels to watch

From current levels, the commodity's recovery move is likely to confront immediate resistance near $1322 level above which the metal seems to immediately dart towards $1330 resistance area. On the flip side, sustained weakness back below $1315-14 support could accelerate the slide immediately towards $1310 level before the metal eventually aims towards testing 100-day SMA support near $1305 region.