Go for it, as long as its not HD the 5770 should run most games at minimum medium settings,
I play most games at 1920x1080 at max settings with my 5770.
Can an i3 530 bottleneck a 5770?If yes,can moderate overclocking solve that?? -i would say it will not bottleneck your 5770.
Also if you want more speed in the near future you can do a slight overclock on that CPU with no problem to 3.4-3.6 GHz.
From that overclock the best results you get wile using windows, other programs and also loading time is shorten in applications and when you start your PC.