Gold: dollar reigns and non-committed bulls bail-out, eyes to $1,172

The US dollar has been holding form on and around the 95 handle with bulls leaning against both an optimistic and hawkish Fed, underpinned by a strong US economy and higher US yields. US equities continue to outperform leaving gold out of favour with investors. The updated North American Free Trade Agreement deal created a risk-on environment on Monday which weighs on gold prices and the fact that industrial metals, such as copper, are unable to break out of the bear's grips also weighs on the outlook for the precious metal.

US ISM Manufacturing: Slowdown in September - Wells Fargo

Gold should continue to ride the Fed-driven roller coaster lower

"Gold should continue to ride the Fed-driven roller coaster lower, after the FOMC raise," rates as expected at the September meeting and kept the dot plots trajectory largely unaltered. Mr. Powell and friends lifted the long-run dot and went to great lengths to say that dropping any reference to "accommodative" in the communique did not mean that they will be straying from their previously announced plan for no," analysts at TD Securities explained.

Gold levels

There is hope for gold — but barriers towards sustained rally remain for now - TDS

“The daily chart shows that spot remained below all of its moving averages, with the 20 DMA still directionless, but anyway capping advances. Technical indicators in the mentioned chart spent the day consolidating in bearish territory,  with the RSI slowly turning south, keeping the risk leaned to the downside”, said Valeria Bednarik, Chief Analyst at FXStreet. 

There has been a recent drop below the prior daily cloud base at $1195 level extending the range to $1180/$1214. The 61.8% fib and 76.4% at $1,172 are near-term downside target level. $1,160 was the start of the retracement back on 15th August  - 2018 low, (lowest since Dec 2016 prices).