Gold – High volatility in the market
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.