The drop in the gold prices
appears to have stalled around USD 1134.15 (50% of July low-Oct high) after the
US
ISM data showed manufacturing activity stagnated in October.
USD resilient
So far, the markets have not
reacted negatively to the weak US data. Moreover, the employment index under ISM
was the weakest since Aug 2009. Still, the Treasury yields have held up well.
The 2-yr yield is up one basis points; largely unchanged after the data. The
10-yr yield has also stayed unchanged after the data; up almost 3 basis points.
Consequently, the USD index has seen no action. Still, the metal has
been able to find support around USD 1134 due to weak data. Ahead in the day,
the movement in the USD index could offer cues to the metal.
Gold Technical Levels
At USD 1134.35/Oz, the
immediate support is seen at 1134.15 (50% of Jul low to Oct high), could push
the metal lower to 1130.25 (Oct 5 low). On the higher side, 100-DMA at 1138.70
and 50-DMA 1140.408 would open doors for a rise to 1147.69 (38.2% of Jul low to
Oct high).
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