SPOT GOLD – thickening daily cloud pressures for test of 200SMA
Spot Gold stands at the back foot on Monday and dipped close to last week’s low at $1270, after coming under fresh pressure on signals that US tax cut plan is closer to passage.
Rising bearish pressure could result in break below $1270 where basing attempts were seen and eventual push towards key supports at $1266 (200SMA); $1263 (27 Oct low) and $1260 (01 Oct low).
Last Friday’s strong rejection at daily cloud base and weekly close in red (the second straight bearish week) were negative signals.
Also, thickening daily cloud continues to weigh and support bearish scenario, along with expectations for rate hike on next week’s FOMC monetary policy meeting.
Monday’s action stays under thick hourly cloud (spanned between $1276 and $1283) which is expected to limit upticks and keep near-term focus at the downside.
Res: 1276; 1283; 1285; 1289
Sup: 1270; 1266; 1263; 1260