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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Gold lower as DJIA set to open above 20K

Article By: ,  Financial Analyst
January 25, 2017 2:29 PM

Precious metals are down for a second day as investors appear to be buying equities and possibly the dollar in favour of perceived safe-haven assets. Index futures suggest the Dow will open above 20,000 for the first time while the S&P 500 is set to climb to a new record high. In one way or another everything also hinges on the direction of the dollar. As reported yesterday, the Dollar Index is currently testing a critical technical level at 100. A decisive break below this level could send almost everything priced in the dollar higher, including gold and silver. But it appears as though the dollar is making a comeback, and if it bounces back sharply then buck-denominated precious metals will likely come under further pressure.

From a technical point of view, gold – just like the dollar – is currently consolidating between two key areas, so it is poised for a big move but at the moment it is not very clear which direction the move will be. Support comes in the $1194/$1200 region while resistance is at $1220 – this being the 38.2% Fibonacci retracement level and also a pivotal support/resistance level from the past. If this turns out to be the high for gold this quarter then it would represent a shallow pullback (38.2%), meaning the potential falls could be huge. If the metal does break $1194 support then a drop to at least $1180 would become likely, possibly a lot lower over time. Conversely, if gold breaks $1220 resistance then it will likely go up sharply, towards the next bullish objective at $1250, which was previously support.

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