Gold steadily extends recovery move from yesterday's 3-week lows

   •  Reviving safe-haven demand lends support. 
   •  Weaker US bond yields provide an additional boost.
   •  Still set for second consecutive weekly declines.

Gold extended its steady up-move through the mid-European session and recovered part of previous session's losses to near three-week lows.

The precious metal stalled two consecutive days of a sharp slide and was seen benefitting from reviving safe-haven demand. A fresh wave of global risk aversion trade, as depicted by a sell-off across European equity markets, was seen underpinning demand for traditional safe-haven assets, including gold. 

The risk-off mood was further reinforced by a sharp slide in the US Treasury bond yields, which eventually provided an additional boost to the non-yielding commodity's modest recovery move on the last trading day of the week. 

However, a modest US Dollar rebound, which tends to dent demand for dollar-denominated commodities, was seen capping gains, at least for the time being, with the yellow metal struggling to gains any strong follow-through traction.

Traders now look forward to the US ISM manufacturing PMI and speeches by influential FOMC members for some short-term trading opportunities. Nevertheless, the metal remains on track to post second consecutive week of declines but might still hold within a three-week-old trading range.

Technical levels to watch

Any subsequent recovery move beyond $1280 level is likely to get extended back towards 100-day SMA near the $1285 region, above which the commodity could dart towards $1293-94 supply zone.

On the downside, weakness back below $1274 level might negate prospects for any recovery and accelerate the fall towards the very important 200-day SMA support near the $1266 region.