Gold trades at two-week lows

Gold prices dropped to $1230 on Thursday; the lowest level since February 15 and continue to trade around the same as focus shifts to Yellen speech. 

A weaker than expected China Caixin services PMI failed to lift the yellow metal. Moreover, with the 2-year yield at highest since 2009 and heightened odds of a March rate hike bets; there is little incentive to hold the zero-yielding yellow metal. 

Real rates to remain low

Fed may hike rates at a faster rate during the Trump Presidency, however, it is worth noting that rates are moving higher from near zero levels. This means the real interest rates, which are currently negative, would still remain low after Fed rate hikes. That is likely to support the yellow metal in the long run. 

As for today, the metal is largely at the mercy of Fed chair Yellen speech. 

Gold Technical Levels

The metal breached the support offered by a rising trend line coming from Dec 23 low and Jan 27 low. The trend line resistance is seen today at $1236, which, if breached would expose $1244.71 (Feb 8 high). On the lower side, breach of support at $1216.80 (Feb 15 low) could yield a sell-off to $1200 (zero figure) levels.