Gold meanders on stronger dollar.
Bullion.Directory precious metals analysis 13, January 2016
By Christopher Lemieux
Marco Strategist; Twitter @Lemieux_26
Gold continues its second day lower, falling to $1,079.60 per oz. Sentiment has recovered, and risk assets pumped, following the People’s Bank of China squeezing yuan short-sellers and keeping the exchange rate fixed for the second day.
Chinese trade data was better than expected with imports only declining by four percent opposed to expectations of a 7.9 percent drop. Exports rose by 2.3 percent year-over-year, far outpacing the consensus of a 4.1 percent drop. However, these numbers remain skeptical and, perhaps, front-loaded ahead of the Chinese New Year.
As expected, the paradigm continues any sign of strength from gold is stomped out. Price action is a bit oversold intraday, but the daily chart did have warning signs telling traders to take some profits.
#gold looking like it could continue to pull back on daily chart. #dollar could see strength
— The Realist (@Lemieux_26) January 12, 2016
The 4H relative strength index is at an area where gold has bounced before at 36, but the daily chart shows that there could be more room to run to the downside (aside from any headline risk).
Intraday support is seen at $1,077 and $1,073. Resistance is at former support at $1,083 and $1.088.
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