Gold – High vo­latil­ity in the mar­ket

Financial Mirror (Cyprus) - - FRONT PAGE -

Gold fi­nally break­ing be­low $1180 support level re­sulted in the metal fall­ing as low as $1131 on Fri­day morn­ing. With US Dol­lar de­mand run­ning high fol­low­ing strong US eco­nomic per­for­mances, Gold ac­cel­er­ated to the down­side. How­ever, the com­ment made from Janet Yellen re­gard­ing the need for “sup­port­ive pol­icy to re­main” re­sulted in Gold rev­ers­ing and the com­mod­ity recorded its largest daily gain since early June ($47). Aside from Fri­day’s Ad­vance Re­tail Sales, high risk eco­nomic data from the US is lower this week. Gold will con­tinue to move in ac­cor­dance to de­mand for the USD, but Gold in­vestors should re­main very vig­i­lant to­wards any pos­si­ble USD profit-tak­ing in the next cou­ple of days. The pre­vi­ously crit­i­cal $1180 support level will now act as ma­jor re­sis­tance, but a fur­ther dovish com­ment from the Fed would en­cour­age Gold bulls to chal­lenge $1180. Over­all, Gold break­ing be­low $1180 was a crit­i­cal in­di­ca­tor that the bears are in con­trol of the longer term fu­ture for Gold. As long as wide­spread USD profit-tak­ing doesn’t oc­cur, Gold should con­tinue grad­u­ally mov­ing to the down­side. Pos­si­ble support can be found at $1160, $1149 and $1140.

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