Gold traded to new lows Tuesday, as investors cling to the U.S. dollar ahead of the Federal Open Market Committee meeting slated for Wednesday.
The price of gold hit a high of $1,731.20 overnight, just stretching over Monday's high. Gold's fresh lows early Tuesday signal an outside bearish day. The weakness in gold is apparent, but after it stalled out against resistance at the $1,730 area, I believe sellers have found the path of least resistance to be lower, as equities traded sharply lower after poor earnings. The dollar index traded to a low of $79.535 Monday and found support without breaking a crucial level against previous lows.
Even with strong buying out of
So, how am I trading gold now?
With the 50-day moving average hovering at the $1,725 area, I will be looking there to sell the first test. Only a close back above resistance at $1,732.40 can provide any bullish momentum to this market. As it seems now, the psychological $1,700/$1,690 (Levels should serve as support on the downside.).
Resistance — $1,724.7, $1,732.4**, $1,739.4***
Support —$1,690**, $1,679*