Gold drops to 6-week lows on stronger USD
- Bullion trades below $1,270/oz.
- Strong USD weighs on safe have metal.
- Next target at $1,262/oz, October low.
The ounce troy of the precious metal is trading in multi-week lows in sub-$1,270 levels on Tuesday, all amidst a generalized sentiment towards the greenback.
Gold weaker on USD-buying
The yellow metal is accelerating the downside today in response to a strong rebound in the demand for the buck, which lifted the US Dollar Index (DXY) to the 93.30 region, up for the second straight session.
Bullion has intensified the decline after being rejected from levels above the critical barrier at $1,300 the figure in November and is trading in the lower end of the sideline theme prevailing since October between $1,260 and $1,310.
In the meantime, the safe have metal remains vigilant on the prospects of further tightening by the Federal Reserve in the next months. In this regard, CME Group’s FedWatch tool sees the probability of a rate hike at the December 13 meeting at just above 90%.
Today’s US docket saw Markit’s services PMI at 54.5 for the month of November, the ISM non-manufacturing at 57.4 and October’s trade deficit at $48.7 billion, all readings coming in below expectations.
Gold key levels
As of writing Gold is down 0.77% at $1,268.20 and a breakdown of $1,262.80 (high Oct.6) would expose $1,257.10 (low Aug.8) and finally $1,249.40 (low Jul.26). On the other hand, the next upside barrier is located at $1,284.08 (21-day sma) seconded by $1,292.50 (high Dec.1) and then $1,303.40 (high Nov.27).