Original article found on economiccalendar.com
Gold prices found some support below US$1250 per ounce on Friday, which initially helped underpin prices in early European trading on Monday, but downside pressures prevailed for the day overall.
Risk appetite was mixed on Monday with some concerns over the latest Chinese industrial and retail sales data released over the weekend, offset by firmer investment data a generally confident tone from People’s Bank of China (PBOC) Governor Zhou’s over the yuan.
The dollar pushed higher against major currencies in Europe, although movement was relatively contained amid a lack of major economic releases. There was a cautious underlying tone ahead of Tuesday’s Bank of Japan policy announcement and the Federal Reserve statement on Wednesday. Concern over the risks of a less dovish FOMC tone was significant in discouraging gold buyers.
The latest COMEX data recorded the strongest bullish position for 13 months according to the latest data which will increase the risk of position squaring into the meeting and leave prices vulnerable to any shift in sentiment if the Fed is more hawkish.
European bourses were firmly in positive territory during the morning session while oil prices were lower. Gold prices briefly spiked higher to the US$1260 resistance area ahead of the US open without being able to break higher and the failure triggered significant selling.
Although there were no significant US data releases, the dollar continued to edge stronger during the New York session. As oil prices moved lower with WTI dipping below the US$37 p/b level and commoditycurrencies retreated, gold buyers could find little incentive to buy. There was a fresh slide in prices to below the US$1250 level and lows just below US$1245 into the European close.
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