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16 Sep 2013
Gold catching a bid on weak DXY - resistance looms at 1,358
FXstreet.com (Barcelona) - Gold is rallying on an unwinding of short positions that were tied to a strengthening DXY. That may or may not be a temporary phenomenon based on the data / news flow out of the US this week.
Gold’s reaction to Summers-induced DXY sell-off likely temporary
Gold is catching a $20+ lift early in the Monday session thanks to a severe bearish reaction in the DXY to the news that Larry Summers will not be assuming Ben Bernanke’s position as the Fed Chairman. Gold bugs had better tread lightly in their long positions though as the yellow metal remains technically weak and the DXY will be bounced around all week by heavy flow of market-moving data points out of the US and other major countries. Traders will get to react to EuroZone CPI, the US NY Empire State Manufacturing Index, US Industrial Production and Capacity Utilization – and that is just on Monday.
Technical outlook for gold
Gold broke down technically last week when it closed below 1,351. Technicians say that the next projected support level for gold at 1,308 was tested on Friday. So, they note, a bounce was to be expected – and it is now in progress. Resistance for gold comes into play at 1,358 and could extend to 1,373 on an extreme bounce.
Gold’s reaction to Summers-induced DXY sell-off likely temporary
Gold is catching a $20+ lift early in the Monday session thanks to a severe bearish reaction in the DXY to the news that Larry Summers will not be assuming Ben Bernanke’s position as the Fed Chairman. Gold bugs had better tread lightly in their long positions though as the yellow metal remains technically weak and the DXY will be bounced around all week by heavy flow of market-moving data points out of the US and other major countries. Traders will get to react to EuroZone CPI, the US NY Empire State Manufacturing Index, US Industrial Production and Capacity Utilization – and that is just on Monday.
Technical outlook for gold
Gold broke down technically last week when it closed below 1,351. Technicians say that the next projected support level for gold at 1,308 was tested on Friday. So, they note, a bounce was to be expected – and it is now in progress. Resistance for gold comes into play at 1,358 and could extend to 1,373 on an extreme bounce.