Gold Looking Exhausted

(Kitco News)- Gold continues to struggle against the backdrop of easinggeopolitical tensions and the strength in the dollar. The European Central Bank announced last week that rateswould remain unchanged, which initiated further capital flows into the dollar,as yield differentials widened between the U.S. and Europe. The euro has beenvery resilient at the 1.20 euro/dollar level and a break below this would bethe next catalyst for lower gold prices. Technically gold is hovering aroundthe 200-day moving average, with support atthe $1,307 area. A break here suggests a test of $1,298. The upside technicallevel resides at $1,317 initially, but a break above the $1,332 area isrequired to bring in fresh buying.

By Peter Hug

Contributing tokitco.com

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