Gold: Back above $1180

Robust US Advance Retail Sales on Friday afternoon pressured Gold into extending below its short-term consolidation triangle and finding support around $1145. Investors closing USD options later the same afternoon encouraged a bullish reversal, with Gold concluding the week at $1188.

The upcoming week is heavier with US economic releases, and Gold investors should continue keeping a close eye on demand for the USD. The higher risk economic releases at first glance appear to be the FOMC Minutes (Wednesday) and US Inflation for October (Thursday).

It should be noted that Gold has just surpassed the previously psychological $1180 support level (this time as resistance), which suggests that Gold bulls maybe attempting an upside rally after the bears took control of Gold’s direction in recent weeks. A dovish Federal Reserve comment on Wednesday evening would represent Gold’s best chance to push above $1200. At the same time, an unexpected hawkish comment would accelerate demand for the USD and send Gold back down to $1150.

The long-term perspective for Gold remains bearish but potential short-term swings higher could find resistance around $1195, $1208 and $1215. Downside momentum would find support located around $1173, $1161 and $1161.


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