Spot gold remains in positive territory after Wednesday’s rout, currently up $21.55 trading $1718.40. UBS reported today, via an emailed report, that a dip below $1700 an ounce was attracting a fair amount of physical purchases. Prices in the cash market have also bounced up from the 100-day simple moving average (SMA), which currently sits at $1692.67, just a few points above Wednesday’s intra-day low of $1688.40. The 14-day Relative Strength Index (RSI) now trades around 47.64 after almost going into overbought territory yesterday after the LTRO euphoria saw risk assets on their highs, with spot gold hitting $1790.75 on the upside. The Federal Reserve’s QE balloon popping statement caused the yellow precious metal to register its biggest single drop since 2008. Whether or not the reasonable bounce seen from the 100-day SMA is more of a self fulfilling prophecy remains to be seen. The US dollar has seen very little movement so far during Thursday’s session, with market participants so far picking up the pieces from yesterday’s rout.
EasyForexNews Research Team