Gold dropped heavily on Yellen, back below $1,300 level

Gold fells below $1,300 an ounce ahead of Comex settlement and spot traded at a low of  $1,293.49 after Yellen's comments earlier today.

Yellen's comments

Gold has been making a comeback and had traded as high as $1,313.59 spot overnight in the Tokyo shift, beating down the doors of the 200-hourly SMA at 1308.32. However, December gold was down -$11.70, or 0.9%, at $1,299.80 an ounce ahead of the Comex close today. Spot continued to trade in a bearish trap on the back of a rally in the Dollar Index that was up 0.6% at 93.236 post her bullish/ hawkish remarks around inflation and interest rate hikes. 

• DXY invigorated by Fed's Yellen remarks
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However, the markets are not entirely convinced that Yellen is herself convinced that low inflation is 'probably only temporary'. Yellen was saying that the inflation puzzle justifies raising rates only gradually and she was not sure that future Fed rate hike path will be predictable. However, more on the hawkish side were her comments that she is wary of raising rates 'too gradually'. 

The dollar gave back some ground to 92.995 at the time of writing, +0.37%, while stocks were unchanged after Yellen's comments on inflation with the S&P 500 flat at 2,497; Dow up 12 points at 22,309.

Fed's Bostic: Open minded about December rate increase
 Gold levels

Technically, however, gold remains in bearish territory below the rising channel's trend support line, (23.6 Fibo), around 1323. To the downside,  the 38.2% Fibo level of the rise measured between 1204.81 to 1357.53 at 1299.20 are immediate support levels where the spot price is oscillating around currently. Further out, gold bulls need to get back above the double top highs, the 1334 zone for a defining change of course, while to the downside, 1288 is the Sep low so far. 1280 is a near-term psychological support level and 1263.85 26th Feb highs are on the wide as next key support level.