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Gold spikes to 4-week tops but fails to extend the momentum

   •  Hits 4-week tops on persistent USD selling bias/risk-off mood.
   •  December Fed rate hike expectations cap additional gains. 

Gold quickly reversed the US macro data-led bullish spike to 4-week tops but has still managed to hold in positive territory for the second consecutive session.

The yellow metal jumped to an intraday high near the $1290 region following the release of US economic reports on retail sales and inflation. The market seemed unimpressed by today's macro data, with persistent US Dollar weakness benefitting dollar-denominated commodities – like gold. 

   •  US: CPI for all items increases 0.1% in October as shelter index rises
   •  US: Retail and food services sales for Oct. 2017 were $486.6 billion, an increase of 0.2% from Sep.

The data, however, was also seen having little monetary policy implication. In fact, the probability for a December Fed rate hike move remains above 90%, according to the CME Group's FedWatch Tool, and eventually kept a lid on any follow through up-move for the non-yielding metal.

Meanwhile, the prevalent risk-off environment, as depicted by a sea of red across global equity markets, underpinned demand for traditional safe-haven assets and helped the precious metal to maintain positive bias through the early NA session.

Technical levels to watch

A follow-through momentum beyond $1290 level is likely to accelerate the up-move towards $1295 intermediate hurdle en-route the key $1300 handle. On the downside, any meaningful retracement below $1284 level is likely to find support near the $1280 level, which is closely followed by 100-day SMA support near the $1278 region.
 

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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