Gold: continues lower testing key $1,275 area

Gold has continued to slide in Asia after closing lower on Friday while market concerns over the political fall-out in Spain have so far been muted, however, investors are concerned over any likelihood of the success of the Republican tax-cut proposals.

At the same time, markets are pricing in the Fed fund futures yields that continue to price the chance of a December rate hike at 76%. Spot fell from $1,2834.14 in London to $1,275.51 in the US session and fell to $1,273.43 in Tokyo on Monday. 

The Catalan vote for a referendum was disrupted overnight in Spain with violence by the National Police, instructed by the Spanish government that argues the vote was illegal. However, the outcome is that 90% Of Catalans voted "Yes" To leave Spain – RTRS. (Catalan holds 20% of Spains GDP and the political turmoil could well be a catastrophic fundamental event for markets and equally, it could drive investors to gold as a safe haven).

The week ahead: expect transitory weakness in September’s nonfarm payroll growth - Nomura

Gold levels

Technically, the daily chart has the 20-D SMA crossing below the 50-D SMA around 1294 as a bearish development capping previous rallies while the lows are now below 24th Aug outside stick's long bullish wick at 1,281 opening territory to 1,267 as a previous double-bottom area. 

Technical indicators have turned moved into negative territory. In the 4 hours chart, the price keeps developing well below all of its moving averages, with the shortest currently acting as dynamic resistance at 1,294.25 with a target back above the psychological 1,300 level.