Gold prices rose on Tuesday, supported by weakness in the U.S. dollar index, though receding worries about the outcome of the U.S. election and expectations of a U.S. rate increase in December could mean lower levels. Recent weakness in the U.S. dollar provided a floor to gold. U.S. gold futures settled up 0.50 percent at $1,262.90. The U.S. currency fell by as much as 0.3 percent, prior to paring losses as it retreated from Monday's seven-month high against a basket of currencies. U.S. consumer prices rose in September, suggesting a steady build-up of inflation pressures that could keep the Fed on track to raise interest rates in December. The Federal Reserve is expected to take actions in December, a weight on gold in the coming month. There's also more optimism that Hillary Clinton will probably win the election, a downbeat news for the yellow metal.

On chart, spot gold rose modestly, but was kept below the 200-day moving average of $1,267. The MACD index showed mounting bullish bets in near term, suggesting gold might continue to rise with resistance at $1,267 and $1,276. In case of breakthrough, it will move rapidly toward the 100-day moving average of $1,313. The support can be found at $1,250. Once the level is breached, this round of rally would be snapped.

 
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