Gold extends the drop near $1,330

The troy ounce of the precious metal is challenging 2-week lows in the vicinity of $1,330 at the beginning of the week.

Gold lower on probable rate hike

Bullion has come under renewed selling pressure following speculations that the Federal Reserve could hike rates at some point in the next months.

According to FOMC officials (Lockhart, Dudley and Williams), a rate hike at the September meeting remains ‘on the table’, lending extra support to the greenback in detriment of the USD-denominated assets. In the same direction, Fed’s VP S.Fischer said on Sunday that the domestic economy is approaching its targets for inflation and employment.

According to CME Group’s FedWatch tool, the probability of a rate hike next month is 12% and nearly 40% at the December meeting.

Gold key levels

As of writing Gold is retreating 0.68% at $1,337.00 facing the next support at $1,327.01 (55-day sma) followed by $1,312.80 (low Jul.21) and then $1,301.34 (23.6% Fibo of the 2016 up move). On the other hand, a break above$1,366.00 (high Aug.2) ahead of $1,374.90 (2016 high Jul.6) and then $1,391.40 (2014 high Mar.17).