- Gold tumbled on Monday, giving back all the gains it posted on Friday to trade more or less unchanged, pressured by a strengthening US dollar. Indeed, given the absence of any major news from the geopolitical front recently, movements in the greenback could continue to dictate gold’s near-term direction. In this respect, the next major market mover for the dollar may be tomorrow’s release of the minutes from the latest FOMC meeting, where officials kept rates unchanged and provided little in terms of policy signals. In fact, the statement contained very few changes from the previous one, and most of those related to the recent hurricanes. As such, we expect investors to scrutinize the minutes for the Committee’s view on the recent soft patch in inflation. Given that a December rate hike is almost fully priced in by now, anything that puts that prospect in doubt could work against the dollar and thereby, help gold recover.
- Gold traded lower on Monday, but hit support at the 1275 (S1) level and subsequently, it rebounded somewhat. The precious metal continues to oscillate within the sideways range between the support zone of 1265 (S3) and the resistance barrier of 1300 (R3) and as such, the short-term outlook appears to be flat. Having said that though, there is the prospect for further rebound tomorrow, in case the FOMC minutes are indeed seen to be on the cautious side. As such, we could see a test of the 1286 (R1) zone soon, where a clear break could set the stage for further bullish extensions, perhaps towards the 1293 (R2) barrier.
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- Switching to the daily chart, we see that the metal continues to trade within the wide sideways range between the psychological zones of 1300 (R3) and 1200. In our view, this keeps the broader outlook flat as well.