A strengthening dollar and some profit-taking continued to weigh on Gold

A strengthening dollar and some profit-taking continued to weigh on Gold during Monday’s trade. In addition, the announcement that the CME would be raising initial and maintenance margin requirements on precious metals, pushed gold and silver down even further. Gold margins will be raised by 5.9% and silver by 11.5%, effective from the close of business today.

Gold prices appear to have stabilised after the recent bout of liquidation, with prices back around the levels seen in late October. Although prices have stabilised, gold has lost momentum and is in reactive mode. Consequently, exogenous factors and the dollar remain key in terms of dictating price direction over the balance of the week, with the dollar effect and the safe haven status of the metal likely to continue battling it out.

Gold prices are currently trading sideways heading into Tuesday afternoon. Eurozone debt concerns continue to circle overhead however, with the main fear that Ireland may be forced to accept a bailout, supplemented by fresh concerns over Portugal.

Gold support is at $1,354 and $1,344. Resistance is at $1,376 and $1,387.

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