Gold: Bulls struggle to capitalize on defense of key support

• Gold held on to key support at $1,548 on Wednesday. 
• The bulls are struggling to force a strong bounce amid risk rebound and an uptick in treasury yields. 

Gold defended key support on Wednesday, but so far, a strong bounce has remained elusive. 

The yellow metal bulls absorbed selling pressure near $1,548 - the 38.2% Fibonacci retracement of the rally from $1,445 to $1,611 - and closed Wednesday with 0.20% gains at $1,556, snapping a two-day losing streak. 

The bulls, however, are struggling for follow-through. At press time, gold is trading at $1,555 per Oz, having hit a high of $1,558 earlier today. 

A strong bounce has remained elusive likely due to dollar strength. The dollar index, which tracks the value of the greenback against majors, is currently holding at 98.30, its highest level since Dec. 2.

Meanwhile, the US 10-year treasury yield has also adopted a strong upward trajectory recently. The benchmark yield rose by more than 6 basis points on Wednesday and is currently trading at 1.65%. 

Both yields and the dollar index could continue to gain altitude on Wednesday, courtesy of risk rebound. The futures on the S&P 500 are currently adding 0.27%, having risen by more than 1% on Wednesday. 

Gold, therefore, risks falling to key support at $1,548. The support may hold ground if the weekly US Jobless Claims and Nonfarm Productivity (Q4) prints well below the estimate. 

Technical levels