- Gold is falling as the DXY picks up from 96.15 the low and scores 96.32 as a recent high.
- Gold is now taking on the 200-hr SMA at $1,229.20 and has pierced the recently formed support line from business done at the lows on the 31st October that meets the 5th Nov lows at $1,228 - ( a line in the sand for current price action).
Today could be a test for the greenback given that results of US congressional election results will be coming through in the early hours of Wednesday morning once votes are counted. With all 435 seats in the House of Representatives and 35 out of the Senate’s 100 seats up for election, as well as 36 state governors, there is a great deal to keep an eye on and as we know, elections can bring surprises. However, opinion polls have been suggesting a divided Congress with the Democrats controlling the House of Representatives and the Republicans the Senate. This should mean that the economic and market implications will be limited - Economic policy would be expected to remain unchanged after the election although there is a sense that life might be a little more difficult for Trump's domestic agenda - so some softness in the greenback might be expected which ultimately could be bullish for gold prices.
US Mid-terms - Election Night Live Coverage
Strong services data underpins dollar strength
For the meantime, the dollar is riding a robust ISM services index which rallied up to 60.3 in October, above the 59.3 expected. The bulk of the US economy is made up of services jobs so such a result is significant and the index jumped to 61.6 in September, at the fastest expansion on record.
Gold levels
If bears can get below the 21-D SMA at 1223, the 31st Oct candle stick's lows at $1,212 come as the key downside target ahead of the $1,201 50% retracement. First, bears need to get below the recently formed support line and S2 is then located at $1,222.84 currently. The 4hr stick's RSI has turned sharply lower and MACD is making a bearish crossover.
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