Gold prices recover back to the pivot that guards 200-D SMA
|- Spot gold had been making tracks to the upside, targets the 61.8% Fibo located at $1,287, but succumbed to selling pressure at the highs of $1,279.28.
- Gold is trading at $1,265 having made a recent low of $1,264.
Gold is on the back-foot once again following a bounce in risk apatite which has seen stocks and the greenback sharply higher on Wednesday. In the Christmas Eve shortened session, a number of political headlines were dominating trade which has sent the price of gold higher. Gold rallied from $1259 on Christmas Eve to $1279 today.
Trump Treasury Secretary Steven Mnuchin had tweeted concerning messages which drove a flight to safety ahead of the Christmas Daybreak.
"The only problem our economy has is the Fed. They don’t have a feel for the Market, they don’t understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders. The Fed is like a powerful golfer who can’t score because he has no touch - he can’t putt!",
Trump had tweeted.
Treasury Secretary Steven Mnuchin was tweeting that he had spoken with the CEOs of the country’s six biggest banks to assess the health of the banking system, raising concerns that the administration knows something the market did not.
Risks ahead
US stocks will remain a key player in the price of gold and some analysts are calling a short-term bottom with prices attracting enough for bulls to step in which would likely weigh on gold prices. It is now whether the market will price out the Fed considering the recent downside volatility on Wall Street. Then again, with the US government shutdown and pending Brexit risk on the cards in the New Year, there is likely to be plenty of volatility to come down the line for gold prices and the greenback.
Gold levels
Gold has dropped to the pivot located at 1265 of which needs to give way for a test of the 200-D SMA and confluence of S2 located at 1253. On the upside, the 2018 50% Fibo level at 1262 was a key target which has been breached. 1287 is the 2018 61.8% Fibo. On the flipside, the 21-D SMA is now found down at 1241.
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