Gold: Déjà vu all over again
|The gold price action seen in Asia post Italian referendum results is largely in line with the activity seen on the US Election Day.
Italian PM Renzi suffered a humiliating defeat in a referendum over his plan to reform the constitution, throwing the country and the euro zone into confusion.
The populist parties such as the 5-Star Movement are likely to benefit the most from the political situation.
Consequently, the safe haven metal rose to a high of $1188 before falling back to $1175 levels.
The overall price action is similar to the one seen on November 9, when Trump victory initially led to risk-off and a rally in the metal to $1337.34. However, prices had erased gains to end at $1277 levels.
Gold Technical Levels
A move back above 10-DMA of $1184.50 would open doors for $1200 (zero figure), above which the gains could be extended to $1211.73 (Nov 14 low). On the other hand, a breakdown of support at $1171.07 (Nov 25 low) could yield a sell-off to $1166 (Friday’s low) and $1160.95 (Thursday’s low).
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