Gold Traders Avoid Playing Defense
Fundamentals
Gold futures initially surged after trading opened Sunday evening after the Paris terrorist attacks, but prices gave back most of those gains by the end of the session.? World equity markets remained firm due to traders seeing a limited economic impact.? Nevertheless, Paris remains one of the most important centers of luxury good purchases and the timing of the attacks is bad, in light of the holiday shopping season being upon us.? Retailers, especially luxury retailers, could feel the pinch. Gold prices are also facing pressure from the high likelihood of a Fed rate hike in December.? After the surprisingly hawkish FOMC statement at the most recent policy meeting, the most recent Non-Farm Payroll report showed healthy job growth.? Fed Funds futures are now pricing in a 66% chance of the Federal Reserve raising rates in December, which could mean a stronger US Dollar and pressure for Gold prices.
Technical Notes – View Today’s Chart
Turning to the chart, we see the December Gold contract holding just above the 1075 level.? There is very little support between the 1075 level and 1015, suggesting prices could even test the major technical and psychological support level near the $1000 mark.? Currently the RSI indicator is extremely oversold, which may lend some support to prices in the near-term.?
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