Gold holds above 200-day MA, Fed hike concerns cap gains
- Gold faded the drop below the 200-day MA.
- Still, upside is being capped rising Fed rate hike bets.
Gold (XAU/USD) dropped to a low of $1266 earlier today only to move back above the 200-day MA level of $1268.65 levels.
As of writing, the metal is trading around $1270 levels. The area around $1266-1263 levels has acted as a strong support since Oct. 27.
Despite the recovery from the strong support, the metal is having a tough time exploring the positive territory, mainly due to rising Fed rate hike odds. According to Thomson Reuters data, traders see a 90.2 percent chance of a rate hike at the central bank's next meeting.
Ahead in the day, the metal is likely to track the action in the dollar index (DXY). As of now, the greenback is trading flat lined around 94.84 against the basket of currencies.
Gold Technical Levels
Mohammed Isah from FXTechstrategy writes, "On the downside, support comes in at the 1,270.00 level where a break will turn attention to the 1,260.00 level. Further down, a cut through here will open the door for a move lower towards the 1,250.00 level. Below here if seen could trigger further downside pressure targeting the 1,240.00 level. Conversely, resistance resides at the 1,280.00 level where a break will aim at the 1,290.00 level. A turn above there will expose the 1,300.00 level. Further out, resistance stands at the 1,310.00 level. All in all, GOLD looks to strengthen further on correction."