Gold struggling to register any meaningful recovery

After a tepid recovery bounce in previous session, Gold turned lower again on Wednesday and remained within striking distance of a five-month low level touched at the beginning of this week. 

Currently hovering around $1227 region, a fresh bout of greenback buying interest is weighing on dollar-denominated commodities and exerting selling pressure around the precious metal. Moreover, increasing prospects of an eventual Fed rate-hike action, with CME group's FedWatch Tool pointing to 90% probability of such an action in December, is further hindering flows to the non-yielding investments in gold. 

Meanwhile, the prevalent cautious sentiment is doing little to boost the yellow metal's safe-haven appeal but has contributed towards limiting any sharp downslide.

Today's US economic releases - industrial production and capacity utilization rate, might provide impetus for short-term traders. However, the broader trend would remain dependent on the Fed's next monetary policy move, which would determine the next leg of directional move for the overall US Dollar Index and eventually drive dollar-denominated commodities, including gold. 

Technical outlook

Carol Harmer, Founder at charmertradingacademy.com, notes, "Gold tried the downside and held 1212 twice...we know we have a large base @  1205 and quite a bit of trendline support coming in at those lower levels...We are drastically oversold as you can imagine and therefore I think after 3 days of posting large losses we are in for a correction...and quite a large one...The break point on the downside was 1242....now I think we can go back to there and possibly higher..To take immediate downside threat off we need a break above 1255...If seen we can see the market coming higher once more for 1262 to 1275.....Can we see 1300 again...It seriously is too early to tell....but at 1211 we have corrected 50% of the move up from 1043 which we saw last Nov....so you can see that this 1211/1205 is a mahjor level which is why the market has run out of steam here....Only if we lose 1199 would the pressure be back on the downside..."

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