Investors are growing increasingly optimistic about a recession in the US which is curbing safe-haven demand

Last week, gold has managed to claw back most of the lost ground amid continued uncertainty surrounding the Eurozone. Now, we see the Italian senate vote on austerity measures to rein in the country’s debt, as well as the installation of a new prime minister in Greece. The mood is tentatively upbeat (European equities are marginally up), which explains the muted gains in gold, with safe-haven buying relatively lacklustre.

Even in the gold physical market, after a strong surge last week closing, buying has dropped off since than. Support however exists at the $1,740 level. Barring any major developments or surprises on the Eurozone front, we foresee mostly sideways action in gold today. In addition, the US is on holiday in observance of Veteran’s Day, so the usual catalyst for action later in the day is absent.

In terms of data flow today, an improved US consumer confidence reading might further dent investor enthusiasm, especially gold and silver. Investors are growing increasingly optimistic about a recession in the US which is curbing safe-haven demand.

Gold support is at $1,742 and $1,719. Resistance is $1,783 and $1,800.

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