Gold can’t break the $1700 level yet
Gold failed yet again yesterday ahead of $1,700, the fourth time in the last five trading sessions that it couldn’t achieve a close above the psychological figure. Besides the looming technical pressure of the overhead resistance, bids became thinner when the US House of Representatives passed a temporary extension to suspend the nation’s borrowing limit. Gold is historically sensitive to the US budget deficit and perceived progress on this issue could prove to be detrimental to the yellow metal in the short term. Also weighing on the metal are lackluster physical demand figures in India after the raised import tax earlier this week, and the IMF trimming its growth forecast for the Eurozone. While offers remain firmly entrenched around $1,700, bids should start to materialize again for gold at the convergence of the 200 day moving average and a Fibonacci retracement level at $1,661. This level has been tested today already and so far it has managed to hold.
