Gold trading in narrow range ahead of a breakout this week?
- Gold in a narrow range at the start of the week.
- Politics to drive the dollar and gold, a breakout to occur?
Gold, spot, closed at $1,288.47 on Friday and modestly lower with investors booking in some of the pre-Thanksgiving gain.
The yellow metal has been supported recently due to the bearishness around the greenback that has taken on some downside in the Fed's cautious rhetoric when it comes to raising interest rates. The DXY was down to near a two-month low last Friday, losing -0.4% on the session and closing up at around 92.80, making a drop of 15 on the week and shedding more than 9% so far this year.
The week ahead for Gold
For the week ahead, there are risks associated with the next round of progress in the US tax plan reforms. The Senate appears to be set to hold a floor vote on the tax reform bill next week. Additionally, the probe into Russia's attempt to influence last year's US election took another turn with reports suggesting former national security adviser Flynn has stopped talking to the White House, which perhaps signals his cooperation with the special investigation, led by Mueller.
Fed to hike 4 times in 2018 - Goldman Sachs
As of writing, Gold is trading between a range of $1,289.89 and a low of $1,286.69. Support levels come after $1,283.10 (100-day sma), then $1,280.72 (21-day sma) and finally $1,274.10 (low Nov.11). On the flipside, the next upside barrier is located at $1,297.70 (high Nov.17) seconded by $1,308.40 (high Oct.16) and then $1,317.10 (high Sep.23).