Gold down nearly 1% around $1,240

The troy ounce of the precious metal is extending its weekly drop today, testing multi-day lows in the proximity of $1,240.

Gold lower on rate hike bets

Prices for the yellow metal remain entrenched into the negative territory today, losing around 1% and testing lows in the $1,240/45 area in response to the recent sharp pick up in expectations of a Fed move at its meeting later in the month.

USD-supportive Fedspeak in past sessions has given extra wings to the buck, weighing on the USD-denominated universe and prompting Bullion to recede from 3-month highs beyond $1,260. New York Fed W.Dudley said at his interview with CNN on Tuesday that a case for further monetary tightening has become compelling, while his Philly peer P.Harker added that three rate hikes this year stays appropriate as long as data keep the current track.

Later in the session, USD will be in centre stage in light of the releases of ISM Manufacturing, Personal Income/Spending, January’s inflation gauged by the PCE, Markit’s Manufacturing PMI and the Fed’s Beige Book. In addition, Dallas Fed R.Kaplan (voter, hawkish) is also due to speak.

Gold key levels

As of writing Gold is retreating 0.94% at $1,242.15 and a breakdown of $1,228.10 (low Feb.21) would expose $1,217.30 (low Feb.15) and finally $1,210.40 (100-day sma). On the flip side, the next up barrier is located at $1,257.30 (high Feb.28) followed by $1,260.69 (200-day sma) and then $1,263.10 (high Feb.27).