Gold testing multi-week lows near $1,220

The troy ounce of the precious metal continues to grind lower on Wednesday, currently deflating to the vicinity of $1,220.

Gold weaker on rate hike prospects

The yellow metal remain on the defensive for the third straight week, navigating 7-week lows in the boundaries of $1,220 in response to increasing prospects of a rate hike by the Federal Reserve in the summer.

According to CME Group’s FedWatch tool, the probability of a rate hike in June has climbed to nearly 40% after dropping below 5% last week, following auspicious results in the US docket and supportive comments from Fed speakers.

Gold key levels

As of writing Gold is retreating 0.55% at $1,222.15 facing the next support at $1,215.48 (100-day sma) followed by $1,209.20 (low Apr.1) and finally $1,163.04 (200-day sma). On the upside, a surpass of $1,249.35 (55-day sma) would aim for $1,304.40 (2016 high May 2) and then $1,322.10 (high Aug. 8 2014).