Gold Daily Analysis – November 21, 2017

Gold prices dipped lower on Monday but trade slightly higher on Tuesday morning as the fall in the euro due to the rising political indecision in Germany strengthened the US dollar to a nearly one-week high.

On Monday, Chancellor Angela Merkel said that she would prefer new elections rather than lead a minority government after the talks to form the country’s next government collapsed overnight. This raised concerns over the future leadership of Chancellor Merkel.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.31% to 93.90.

The outlook for higher interest rates added to gold weakness as the Federal Reserve’s is expected to raise rates in their next meeting on December and expectation of three rate hikes in 2018.

Technical View

The last session of Gold future market is clearly a result of a retest in support line of the “Ascending broadening wedge” channel which triggered the bullish momentum. The last candle signals a bearish momentum as it canceled the uptrend breakout.

The market is expected to continue the same trend and could test $1282-$1284 levels in the upcoming sessions. Resistance holds at $1286 and support holds at $1276.