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Gold Up on Headline Risk, Downside Momentum Weakening

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Gold futures are higher over global concerns; gold remains a hedge against the US dollar and equity reversions.

Christopher-LemieuxSMBullion.Directory precious metals analysis 29 September, 2014
By Christopher Lemieux

Senior FX and Commodities Analyst at FX Analytics


Gold futures remain elevated on ongoing global concerns that are worrying traders. The S&P futures were down nearly 20 points leading into the US trading session, but the “buy the dip” mentality has bounced equities off of session lows.

An interesting development  is occurring in Hong Kong, as a reported 100,000 individuals flood the streets in protest, demanding China to loosen its grip on the former British territory. Protesters are demanding democracy, while communist China still handpicks electorates. The Hang Sang was driven to two-and-half month low.

Although the price action for gold has been lackluster of late, gold still remains a go-to hedge for both dollar weakness and equity sell-offs.

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Price action has remained above a key ascending trend line created with the 2013 lows.

The extreme bearish sentiment could wane with the daily RSI remaining oversold for the entire month of September. Key upside potential lies at $1,239.10.

The momentum indicator (ADX) has begun to tick lower, signalling weakness in the current trend. This also corresponds to the – DMI declining.

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