Gold struggled to hold the $1,262-65 major support band yesterday, but overnight the stronger dollar proved enough to snap the two-month level. Selling accelerated on the break as technical traders jumped on board. We are under a week away from the Fed meeting in which a 0.25-point increase is baked into the market. The question is whether this weakness in gold is an image of the December 2015 and 2016 charts, where the metals began significant rallies after the rate-increase announcement, or if we are in a different paradigm this time around.

The $1,250 level is the next solid support line, with a break here suggesting a move as low as $1,237 initially. The gold price needs to recapture $1,262 on a close basis to stop the bleeding. The gold price has been unable to rally despite a downward-trending U.S. dollar, gold hasn’t mustered so much as a rally effort in over a week.

Although gold has held above its October low of $1,267 after posting its narrowest monthly range in 12 years in November, it broke lower and challenged that level on Tuesday. Bullion has risen 10 percent in the year to date, but its price momentum has stalled in the second half as global equities have commanded most of investors’ attention, along with alternative assets such as bitcoin. A diminution of geopolitical and U.S. economic uncertainties in recent months has also contributed to gold losing its luster