Gold gains appears capped around $1,280/oz

Gold gives away Monday’s gains, back below $1,280/oz.
Safe haven demand alleviated on profit taking sentiment.
Traders wary on US tax reform headlines, Fed tightening.

Pablo Piovano FXStreet

The ounce troy of the precious metal is trading on the defensive on Tuesday albeit within a tight range around the $1,280.00 area.

Gold looks to Trump, Fed for direction

Bullion is retracing part of the important gains seen at the beginning of the week, with gains finding quite strong hurdle around $1,282, area coincident with the 21-day sma. The demand for the safe have metal remains subdued in response to a solid rebound in the greenback, which pushed the US Dollar Index back above the critical 95.00 handle.

Recent headlines from Saudi Arabia seem to have lent support to the up move in the yellow metal, while the ongoing developments around the US tax reform plan also promise to bring in bouts of volatility to the price action in Gold.

In addition, prospects of further tightening by the Federal Reserve at the December 13 meeting should keep weighing on the safe haven metal and keep occasional bullish attempt contained.

Gold key levels

As of writing Gold is down 0.24% at $1,278.48 and a breakdown of $1,266.40 (low Nov.6) would open the door to $1,264.51 (200-day sma) and finally $1,263.80 (low Oct.27). On the flip side, the next hurdle aligns at $1,282.82 (21-day sma) seconded by $1,285.10 (high Nov.2) and then $1,292.90 (high Oct.20).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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