The risk-on tone that has pervaded through financial markets over the past week is weighing on Gold, says David Sneddon and his team at Credit Suisse in London.
Gold has failed to sustain a break above key resistance at 1522/27 and Sneddon thinks there is now scope for some consolidation before the uptrend resumes (see Chart). This view is reinforced by the break higher in USD and real yields bouncing from long-term resistance levels. He says key support for Gold remains at 1488/40, which should act as the range bottom. A break below this level would lead to a deeper correction to 1405/40. Either way, Sneddon says the long term uptrend remains intact.