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Gold prices above 32.8% fibo and eye $1,262 (50% fibo target)

  • Gold lifted slightly on Monday as investors tread cautiously into the final full week of trade for the year.

Spot gold has been travelling between $1,235/oz to $1,248/oz round numbers with the price penetrating through the 38.2% Fibo at $1,238. The February gold contract climbed $10.40, or by 0.8%, to settle at $1,251.80/oz as being the highest finish since December 7th.

Analysts at ANZ Bank noted that the softer-than-expected US data alongside ongoing trade and global growth woes appear to have capped risk, with markets now turning their attention to the Fed later this week.

Market in a snapshot

"US equities attempted to push higher, but gains pared with the S&P down 0.9% and the DJIA down 1.1% at the time of writing. Key European indices were down 1.1-0.9% with reports of softer Christmas-period retail spending weighing. US Treasury yields were down 2.5-2.9bps across the curve as the market continues to reassess the Fed’s likely path from here."

The US dollar is on the backfoot, although holds onto the 97 handle ahead of the Fed this week. The FOMC is widely expected to hike a further 25bp this Wednesday, taking the target range for the fed funds rate to 2.25-2.50%. However, markets will zoom in on the committee's communication as to whether the recent dovish tone will be upheld by lowering its projections for future rate hikes.

On other risks elsewhere, with just a little more than 100 days to go before the UK is due to leave EU, UK's Prime Minister Theresa May said earlier today that she will present her Brexit deal to Parliament for a vote on the 14th of January and warned that it’s the only deal possible.

"While an increasing number of lawmakers are now calling for a second referendum, May said this would be a betrayal of voters. At the same time, the government has stepped up preparations for the no-deal scenario. Brexit-uncertainty appears set to carry on well into the New Year," analysts at ANZ Bank explained. 

Gold levels

  • Support levels: 1233 1228 1236
  • Resistance levels: 1248 1253 1262

Gold prices are on track for a run to 1262 as being the 50% Fibo level just above the 200-D SMA that is found at 1254.  However, there is a lack of trend or conviction in the daily DMI and RSIs. To the downside, the 21-D SMA is located at 1232 and a break there will open risk to 1211 late Nov lows just below the 100-D SMA ahead of the 1210 round number.


 

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