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"Investors are taking off riskier assets in the S&P 500 and other equities, and looking to come back into safety like gold."
- RJO Futures (based on Bloomberg)
Pair's Outlook
On Tuesday gold prices soared for the first time in three days, as bullish action pushed the spot beyond 1,230. The price closed slightly above it, namely the 20-day SMA, but another downside correction is highly possible today, given that daily technical indicators are short. A lot depends on the news from the Fed today. Dovishness may easily help to bullion to grow up to the next resistance at 1,241 (weekly R1/monthly PP). Contrary to that, a slide under the weekly pivot point should expose the 55-day SMA (1,209), which has got a steep upside slope and should contain a selloff.
Traders' Sentiment
On Tuesday the distribution between long and short SWFX market participants has been flat, as both sides remained committed to earlier-opened positions. Therefore, the former are currently holding the 46% share and the latter are enjoying a moderate majority of 54%.
© Dukascopy Bank SA