Gold firmer in Asia, back above $ 1120

FXStreet (Mumbai) - The yellow metal is gradually extending its recovery mode and now regains 1120 barrier as the demand for the safe-haven picked-up pace after the Chinese PMI readings disappointed markets once again.

Gold trades above 200-DMA

Currently, gold trades 0.46% higher at 1121.50, hovering close to fresh session highs reached at 1121.90 last hours. The yellow metal found renewed strength after the poor Chinese manufacturing PMIs reinforced ongoing weakness in China’s economy and fuelled a fresh wave of risk-aversion into the markets.

Moreover, the recent series of weak US macro data raised bets that Fed will go in for fewer rate hikes this year, which provided fresh impetus to the non-interest bearing gold. The US economic growth slowed sharply in Q4 2015, expanding at 0.7% y/y.

Adding to the positive sentiment around gold, hedge funds and money managers boosted their bullish bet in COMEX gold to a 12-week high in the week to Jan. 26, US CFTC data showed on Friday.

Meanwhile, the focus now remains on a slew of US economic data lined up for release later today for fresh cues on the bullion.

Gold Technical Levels

The metal has an immediate resistance at 1125 (round number) and 1128 (Jan 27 High). Meanwhile, the support stands at 1118.41 (200-DMA) below which doors could open for 1115.30 (Daily Low)