Gold riding dollar weakness ahead of UK PM May's 'no confidence' vote
|- Gold is currently trading at $1246.40 with a recent high scored of $124.96, climbing from a low of $1242 following an unchanged CPI print for November.
- US dollar pierces the 97 handle to the downside, being stripped of some speculators bids on profit-taking.
Gold prices are higher on Wednesday as the dollar contunes to give back ground following a less than supportive release of CPI for November where Core CPI, which strips out volatile food and energy costs, rose 0.2%, came in line with expectations.
Expectations that the Federal Reserve could be less aggressive in hiking interest rates next year and concerns over the U.S. economic outlook, (the development of an inverted yield curve in the U.S. likely attracts renewed investor interest in gold), is helping to underpin the metal and weighs on the greenback. Markets are also fixated on Brexit whereby markets await the results of PM May's leadership challenge vote thatis set to begin at 1800 GMT and set to go through to 2000 GMT -The result is likely to be announced around 2100 GMT.
Brexit vote of confidence pointers, (Standard Chartered Bank):
- On balance, Prime Minister Theresa May is likely to win today’s vote of confidence.
- If she does not win, a Conservative party leadership challenge will take place.
- It is unclear who will stand for the leadership, but both hard- and soft-Brexit MPs are likely to run.
- All scenarios remain on the table, including a general election, a second referendum and no deal.
Gold levels
Gold prices are slightly higher and hold above the 38.2% fibo with the 50% Fibo on the bull's map at 1262, just above the 200-D SMA that is found at 1258. On the way there, R2 is at 1255. On a break of this confluence, the 61.8% Fibo can be found at 1286.
- Support levels: 1239 1236 1231
- Resistance levels: 1248 1253 1256
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