Gold Traders Eye Presidential Election
?? Fundamentals
Gold futures are up modestly for the second consecutive session ahead of today’s election. Futures have taken a sharp turn down in recent weeks, as economic fears have mounted. Hurricane Sandy,and the devastation left by the storm have certainly not helped the economy. Last week’s jobs data was better than expected, helping to alleviate some fears that the US is ready to head off the fiscal cliff. News on the physical Gold front has been very quiet, leaving traders to focus on the economy and the election. The recent wave of selling suggests that the market has become a bit oversold, leaving the possibility of short-covering out there.
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? Technical Notes
Turning to the chart, we see the December Gold chart dropping well over $100 from recent highs. The failure of the Gold contract to break through the 1800 level helped spur on this rally by triggering long liquidation. Friday’s sell-off marked a downside breakout from the consolidation pattern. Prices sold off to the 100-day moving average, which prices have held. Failure to hold this pivotal average suggests prices could continue to drop sharply, possibly testing 1600 on the downside. The RSI remains oversold, which could be supportive of prices in the near-term.
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