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   “¢   Fails to capitalize on overnight up-move, despite retracing US bond yields.
   “¢   Risk-on mood/Fed hike prospects seemed to collaborated towards capping.
   “¢   The prevalent USD selling bias helped limit any immediate sharp downside.

After an initial uptick to fresh weekly tops, gold prices turned lower and eroded a part of previous session’s goodish up-move.

Spot prices inched higher on Wednesday and jumped back above the key $1200 psychological mark, shrugging off a strong rally in the US Treasury bond yields.  

Despite a modest retracement in the benchmark 10-year bond yields, the non-yielding failed to capitalize on overnight up-move and started retreating from an intraday high level of $1206.62.

The downside, however, remained cushioned amid the prevalent US Dollar selling bias, which tends to underpin demand for the dollar-denominated commodities.  

Meanwhile, investors now seemed to have turned cautious and seemed to refrain from placing any aggressive bullish bets ahead of the highly anticipated FOMC meeting next week.  

Adding to this, a continuous improvement in risk sentiment, as depicted by a mildly positive tone around European equity markets, did little to boost the precious metal’s safe-haven status and might further collaborate towards capping any runaway rally.

Later during the early North-American session, second-tier US economic releases – Philly Fed Manufacturing Index, usual initial weekly jobless claims and existing home sales data, will now be looked upon for some short-term trading opportunities.

Technical levels to watch

Any subsequent weakness through the $1200 mark is likely to find support near the $1195 level, below which the metal is likely to slide further towards the $1192-91 region. On the flip side, sustained move beyond the $1206-07 immediate hurdle now seems to lift the commodity further towards $1214-15 supply zone.