Gold Benefiting From Risk On, Gaza
?? Fundamentals
Gold futures are higher once again this morning, boosted by physical demands for the metal. ETF demand for the precious metal rose to a record for the third consecutive session. Many traders also have been encouraged that leaders from both parties have begun Fiscal Cliff talks.
The last time the government found itself in this position, both parties had procrastinated. The fact that leaders are meeting is encouraging, even if both sides are far apart. The conflict in the Gaza Strip also brought about fears that tensions could spill outside its borders. Demand for physical Gold in the Middle East as an alternative investment has also risen due to currency uncertainty.
?? Technical Notes
Turning to the chart, we see the December Gold contract rallying after having a false downside breakout.
Prices are approaching relative highs near the 1740 level, which could act as near-term resistance. This level also coincides with the 50-day moving average, so a move above 1740 could result in further bullish momentum. The RSI is still neutral, despite the rally, suggesting the market can move higher before reaching technically overbought levels.
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