Gold pushing the psychological figure of $1,800
During the Asian session, the IMF released its World Economic Report which highlighted concerns of lower growth prospects and increased risks of another global recession. The IMF cut its estimate of 2012 growth to 3.3% from 3.5% and of 2013 growth to 3.6% from 3.9%. The institution also noted that a failure to resolve Europe’s debt crisis or to effectively combat the looming “fiscal cliff” in the United States would further exacerbate growth prospects. It indicated that in Europe, Spain and France will miss budget deficit targets. The negative press from the IMF caused European bourses to gradually sell off and US equity futures are following suit thus far and are set to open in the red.
Gold is in the midst of its third down day in a row. Traders have come into the market on the short side as gold has failed to close above the technical level of $1,790 and the subsequent psychological figure of $1,800. Besides being the previous high of 2012 from back in February, $1,790 is gaining further strength from the fact that the yellow metal has approached it four times in the past two weeks but has yet to close above it. On the down side, the 21 day moving average at $1,767 is proving to be decent short term support. With the euro losing steam as well, it seems that the risk remains to the downside over the next few days for the precious metals.
