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Gold drops below key fib support

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 14, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - Gold extended weakness to trade below USD 1087.56 (38.2% Fibo of Dec low-Jan high) despite the risk aversion in Europe and sideways action in the USD index.

    Focus on US stocks

    The metal is likely to track the activity in the US stocks. As of now the S&P futures are indicating the index is likely to open 0.25% higher on the day, which is bad news for the safe haven yellow metal.

    Meanwhile, comments from the Fed’s Bullard due later today could affect the demand for the USD and accordingly influence the yellow metal. The US initial jobless claims figure would be eyes by the metal traders as well.

    Gold Technical Levels

    At USD 1086/Oz, the metal could find immediate support 1080.48 (38.2% of Oct high-Dec low), under which the prices could extend the drop to 1075.75 (50-DMA). On the other hand, a break above 1087.56 (38.2% Fibo of Dec low-Jan high) could see the metal test 1100 levels.
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