For a couple of weeks before the push higher gold consolidated a little resting on support at $1240 after making a strong rally back towards this level, which had become significant when it offered reasonable resistance halting its climb a couple of months ago.
After struggling with the resistance level at the $1240 level for several weeks, it fell back to another key level of $1200 where it bounced off strongly. The $1240 level provided some support in July and more recently pushed gold lower in October, so it is significant that it has now broken higher. The market will now be watching the $1300 level as this level was significant earlier last year.
For the most part through October and November last year gold had made a home in between two key levels of $1200 and $1240, and the markets were watching closely to see which way the next big move might be. Gold has received both support and resistance from the $1200 level in the last few months and didn’t appear to be in any rush to move too far away. The $1240 level was significant several months ago when gold received some short-term support there and subsequent resistance.
Gold has been well supported of late by a number of factors, which include the recent U.S. government shutdown and the subsequent slowdown in the United States economy, which have put the spotlight back on the U.S. Federal Reserve and their plan for 2019 with regards to interest rates. A few weeks ago gold was propped up by Fed Chairman Jerome Powell, who downplayed suggestions that interest rates would be raised twice more this year, and reaffirmed that the central bank could remain patient on monetary policy. Gold prices have behaved as you would expect during the recent period of uncertainty, rising as expectations of Fed tightening next year have been cut sharply and equities have sold off. The markets are also focussed on the Fed's current two-day policy meeting, when the central bank is expected to leave interest rates unchanged. Some U.S. central bank officials have been outspoken and said they will be patient in raising rates given the stalemate over global trade, waning business and consumer confidence, and the U.S. federal government shutdown.
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