22 Jan 2016
Gold stays comatose below $1100/Oz
FXStreet (Mumbai) - Gold prices trade largely unchanged on the day around USD 1100/Oz levels as risk-on rally in equities capped upside, while prospects of fresh easing from the ECB and the BOJ kept the bid tone intact.
Drop in safe haven demand
The equities across Asia and Europe rallied in response to ECB Draghi’s hint at more easing in March. There is also speculation that BOJ could ease next week in response to a sharp drop in oil prices and jittery markets.
The US equity futures are also pointing to a rally. Consequently, the safe haven dropped. However, the same factors – prospects of more easing from the ECB and the BOJ – is also ensuring the metal does not fall much into losses despite a moderate uptick in the USD index.
Moreover, the metal is one of the major beneficiaries of the currency debasement – QE or rate cuts.
Gold Technical Levels
The immediate resistance is seen at 1100, above which the gains could be extended to 1105.14 (50-DMA). On the other hand, a break below 1092.45 (previous day’s low) could see the prices drop to 1080.48 (23.6% of Oct high-Dec low).
Drop in safe haven demand
The equities across Asia and Europe rallied in response to ECB Draghi’s hint at more easing in March. There is also speculation that BOJ could ease next week in response to a sharp drop in oil prices and jittery markets.
The US equity futures are also pointing to a rally. Consequently, the safe haven dropped. However, the same factors – prospects of more easing from the ECB and the BOJ – is also ensuring the metal does not fall much into losses despite a moderate uptick in the USD index.
Moreover, the metal is one of the major beneficiaries of the currency debasement – QE or rate cuts.
Gold Technical Levels
The immediate resistance is seen at 1100, above which the gains could be extended to 1105.14 (50-DMA). On the other hand, a break below 1092.45 (previous day’s low) could see the prices drop to 1080.48 (23.6% of Oct high-Dec low).