Gold still below its inflexion point and bearish, despite ongoing macrofunda' political risks
|Gold prices were taken higher by the bulls and futures went on to their highest settlement in two weeks on Tuesday with the weaker dollar -0.45% at the time of writing.
However, U.S. stocks mostly rose on Tuesday as well, with the S&P 500 and the Dow advancing to new records as optimism appeared to grow ahead of the start of the earnings season. Thus, the yellow metal's spot price dropped in the US session from London highs of $1,294 spot to a NY low of $1,288.14.
The DXY also continued to struggle in the US session with a better bid euro on the day, supported by some relief due to Catalonia's Puigdemont speech. Puigdemont's intentions are to negotiate plans for separation through a dialogue with the Spanish government and he thus announced that he will be suspending the referendum result for the time being.
However, for gold, if Europe moves to the bid as well as Asia, where most of the demand is currently, there could be a dramatic turn around the safe haven given that the Catalans are just getting started with their efforts to separate from Spain, as understood today by the 'Spanish govt that considers Puigdemont's speech to be a declaration of independence - El Pais' . . . and not to mention the risks that the US an N.Korean standoff pose.
However, the euro had already caught a bid on the recent hawkish rhetoric from ECB officials.
- Catalonia's Puigdemont: We ask for mandate to declare Catalonia an independent state
- Catalonia's Puigdemont: The referendum was a success despite obstacles
Gold levels
On a technical basis, Gold remains below the key psychological $1,300 inflexion point and within the bearish channel of which starting point was at $1,357 on the 7th September. On the downside, $1253.40 (200D-SMA), if broken opens risk to $1251 (Aug. 8 low) and $1243 (Jul. 26 low). On the flipside, resistances comes back in at $1295.61 (21D-SMA) and $1300 (psychological level).
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