Gold prices traded within a two sided narrow range to begin the week on Monday as the daily range from low to high was only $4.30 cents. Gold for December delivery finished one tick higher to settle at 1264.7. September silver finished uncharged at 16.25. For the day Gold couldn’t gain any footing failing to gain support from a weaker dollar as investors digested sharp precious metal losses in the previous session as the potential for further U.S. rate hikes still remain. The dollar weakened on Monday following sharp gains on Friday, as investors focused on inflation data due this week that could determine the currency’s longer-term trajectory. Usually a weaker dollar supports commodities such as gold that are priced in the greenback, lowering the cost for buyers outside the United States.Gold has largely been trapped in a broad range between $1,200 and $1,300 this year. Also eroding support for gold on Monday was the rise by world equities to record highs following better-than-expected company earnings and economic data from the U.S.
The tight range today tells me traders are looking for new news that will drive price in the near term. Technically December gold will need to hold the 50 and 100 day moving averages at 1253.4 and 1253.5 respectively going forward. Should we have a close under these levels, look for the market to eventually test down near the 200 day at 1232.3. Resistance sits up at 1276.6. With a close over here, look for the market to test 1288.6.
For those interested I hold a free weekly webinar on the grain market each Thursday at 3pm central time. Signup is free and a recording link will be emailed upon signup.