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Gold futures were steady above $1 250 per troy ounce during early trade in Europe today, after closing below the key level for the fist time in more than three months on Tuesday. Investors eye next weeks Fed meeting, set to decide on monetary policy, with outlooks of a rate hike on the table, supporting the US dollar and pressuring gold lower.

Gold futures for December delivery on the Comex in New York traded at $1 255.2 per troy ounce, up 0.54%, at 8:32 GMT. Prices ranged from $1 254.3 to $1 258.5 per troy ounce. The contract dropped 0.46% on Tuesday, reaching a three-month low at $1 248.1.

Silver for December delivery stood for a 0.74% daily gain at $19.060 per troy ounce, while palladium was down 0.37% at $857.30. October platinum was unchanged at $1 385.75.

“The strong dollar may have a further impact on gold and other commodities,” Mark To, head of research at Hong Kongs Wing Fung Financial Group, said for Reuters. “The immediate support for gold is at $1 240 but it could go all the way to $1 200.”

When the value of the dollar rises, the price of dollar-denominated commodities, such as gold, increases for other currencies, lessening their investment appeal.

The US dollar reached a new 16-month high against six other major currencies yesterday, strengthening speculation that the US Fed might raise central lending rate earlier than previously thought.

The Federal Open Market Committee (FOMC), the US monetary policy-making body, is due to meet next week, in a highly anticipated event, as pressure mounts for the Fed to address almost exclusively upbeat recent economic data from the US.

The Fed has kept the the benchmark interest rate at 0.25% for almost six years now, while pumping a massive amount of government funding into the economy, as the struggle to revive growth after the 2008 crash looks to near its final phase.

The assets-purchasing stimulus program, which has been pumping tens of billions of fresh government dollars into the US economy is heading for a late-2015 close, and a rate hike is projected to follow soon after, both events lifting the value of the US dollar even now.

Meanwhile, the confrontation between Russia and the West has fails to offer meaningful support for the haven metal recently, after bumping it some 6% up this year.

Technical support and resistance levels

According to Binary Tribune’s daily analysis, December gold’s central pivot point on the COMEX stands at $1 251.8. In case futures manage to breach the first resistance level at $1 255.6, the contract will probably continue up to test $1 262.6. In case the second key resistance is broken, the precious metal will likely attempt to advance to $1 266.4.

If the contract manages to breach the first key support at $1 244.8, it will probably continue to slide and test $1 241.0. With this second key support broken, the movement to the downside may extend to $1 234.0.

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