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Gold: and the recovery continues

FXStreet (Mumbai) - Gold prices added another $8 to trade around USD 1163/Oz levels on Monday as the Fed rate hike bets continue to drop, pushing the US dollar lower across the board.

Gold indicating no Fed rate hike?

The yellow metal was penalized throughout last one year on account of the rising rate hike bets in the US. The bearish pressure was strong enough to ensure the metal did not respond to Greek led crisis nor to the China’s stock market rout.

However, the metal has been ticking higher since the Sep 17 Fed meeting. The safe haven demand also made a comeback during post-Fed period, while the metal is also gaining during risk-on as witnessed today, which might be an indication that metal traders believe the Fed is not going to hike rates any time soon.

With no major data due, the yellow metal could continue to track the movement in the equity markets and the USD index. Fed speak could also affect the prices.

Gold Technical Levels

At USD 1163.50/Oz, the immediate resistance is seen at 1169.99 (Aug 24 high), followed by a major hurdle at 1200 and 1228.10 (May 17 high) levels. On the downside, a break below at 1156.70 (Sept 24 high), followed by a support 100-DMA at 1143 would expose 1132.90 (Nov 2014 low) and 1121.50 (50-DMA).

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