Tuesday October 15, 2013 08:30
Gold is now pressing new swing lows this morning initially reaching 1251.0 after taking a breather during yesterday's session to consolidate. Gold provided an amazing sell opportunity yesterday against the 1291.5 major resistance level reaching a high of 1291.6, before finishing the electronic session roughly $20 off of the highs. Optimism that a debt deal is within reach in Washington has been the main driver in the selloff. Gold held value following the September meeting which the Fed decided to keep bond purchases fully intact but it gave traders a reason to buy Gold and find value ahead of a possible crisis in Washington. With the shutdown likely causing disinflation as investors prepare for a curtailing in bond purchases at some point next year, Gold has lost its luster. A continued close below 1271.8 is needed to keep the bears in control. Furthermore, a close below Friday's low at 1259.6 will keep this market in an immediate bear pattern. Only a close back above 1271.8 will signal a consolidation and failure to move lower, but truly a new high on the week against 1291.6 will be needed to negate this bearish activity.