Gold jumps as the DXY plunges to 3-week lows

  • Gold regained some charm despite higher US inflation at factory levels.
  • US December rate hike having little influence, already priced in.

Spot gold jumped to $1,238.52 a troy ounce as the greenback entered a selling spiral that accelerated in the US afternoon. The precious metal fell after the release of better-than-expected US PPI, but changed course  as the Dollar Index plunged to its lowest in three weeks, partially amid uncertainty surrounding the US tax reform, but mostly because of EUR's bullish breakout, as the common currency weighs over 57% in the value of the DXY, which stands now around 93.64. Gold reached a key technical level, as it has been rejected from the mentioned area multiple times between October 20th and November 8th. A US Fed rate hike in December seems to have been fully priced in, with speculative interest now paying attention to other signs for direction.

Levels to watch

Beyond the mentioned daily high, the commodity has its next resistance at 1,288.36, the high set on November 8th, with the following resistance being 1,294.12, October 10th daily high. Steady gains beyond this last expose 1,305.96, October monthly high.

The first support is the 1,275.00 region, where the bright metal seems to have a comfort zone, with an acceleration below the level exposing 1,269.92, today's low and also the 200 DMA.

Support levels:  1,274.90 1,267.70 1,260.55

Resistance levels: 1,283.35 1,288.05 1,297.60 

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