Gold challenging session lows around $1,242/oz

The troy ounce of the precious metal remains on the defensive so far this week, coming down to test lows in the vicinity of the $1,240 area for the time being.

Gold weaker on rate hike hopes, USD

Bullion is prolonging its weekly decline after being rejected from recent 3-month highs above the $1,260 mark on Monday amidst a relentless upside in the greenback and rising expectations of a Fed’s rate hike later in the month.

The recent bull run in US yields are reflecting market bets for a Fed move this month, lending at the same time extra legs to the dollar’s rally and exacerbating the downside pressure on the USD-denominated space.

Adding to the downbeat sentiment around the yellow metal, the US Dollar Index (DXY) keeps its march north unabated so far today, gearing up for a potential surpass of the critical barrier at 102.00 the figure.

Gold key levels

As of writing Gold is retreating 0.68% at $1,241.55 and a breakdown of $1,228.10 (low Feb.21) would expose $1,217.30 (low Feb.15) and finally $1,210.34 (100-day sma). On the flip side, the next up barrier is located at $1,257.30 (high Feb.28) followed by $1,260.84 (200-day sma) and then $1,263.10 (high Feb.27).