FXOpen
Gold fell more than $40 an ounce yesterday, dragging the price of the yellow metal to less than $1270 an ounce, which is well below the Brexit levels. The technical bias has turned bearish on all timeframes and we expect some more fall in the near future.
Technical Analysis
As of this writing, the precious metal is being traded near $1272 an ounce. A support can be seen around $1253-$1250, the confluence of a major horizontal support as well as the psychological number. A break and daily closing below the $1250 support area could incite a renewed selling interest, validating a downside move towards the $1210 an ounce.
On the upside, the precious metal is expected to face a hurdle around $1282, the horizontal resistance ahead of $1300-$1303, the confluence of a psychological number as well as the horizontal resistance area and then the trend line resistance as demonstrated in the above daily chart.
US Monetary Policy Outlook
While Monday’s data showing U.S. factories ramped up activity in September fueled speculation that the Fed would lift rates at its December meeting, officials remain cautious. The U.S. central bank would probably not be able to cut interest rates as aggressively as last time around if it were faced with a recession in the next few years, New York Fed President William Dudley said on Monday. Traders remain on the sidelines ahead of U.S. payrolls data for September, due at the end of the week, and other key events later in the year.
Trade Idea
Considering the overall technical and fundamental outlook, selling the precious metal on short term rallies near the above mentioned resistance levels appears to be a good strategy.
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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
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