Gold sits near session tops, just above $1600 mark

• Gold regains some traction amid increasing bets for a Fed rate cut this March.
• The USD maintained its heavily offered tone and provided an additional boost.
• A recovery in the global risk sentiment might keep a lid on any runaway rally.

Gold held on to its mildly positive tone through the early European session and is currently placed near the top end of its daily trading range, around the $1605 region.

Following an early dip to the $1575 region, the precious metal managed to regain some positive traction and has now recovered a part of the previous day's sharp intraday fall to over three-week lows.

Bulls shrug off a recovery in the risk sentiment

Against the backdrop of lingering fears surrounding the global coronavirus outbreak, expectations that the Fed will cut rates at its upcoming meeting this March underpinned the non-yielding yellow metal.

Fed rate cut speculations kept exerting some downward pressure on the US dollar, which provided an additional boost to the dollar-denominated commodity and remained supportive of the uptick.

Meanwhile, a modest recovery in the global risk sentiment did little to hinder the intraday positive move, albeit might turn out to be the only factor capping any strong demand for the safe-haven commodity.

Hence, it will be prudent to wait for some strong follow-through buying before positioning for any further near-term appreciating move and the resumption of the prior/well-established bullish trend.

Moving ahead, market participants now look forward to the release of the US ISM Manufacturing PMI, which might produce some short-term trading opportunities later during the early North-American session.

Technical levels to watch