Gold fell on Wednesday, ending three days of gains, but traded near a three-week high as investors took shelter in the precious metal amid plunging oil and equity prices.
Comex gold for delivery in February dropped 0.43% to $1 214.2 per troy ounce by 08:22 GMT, having shifted in a daily range of $1 219.4 and $1 212.1. The precious metal edged up 1.28% on Tuesday to $1 219.4, a third consecutive daily gain, but not before it touched its highest since December 16th at $1 223.3.
Stocks dropped in value yesterday on the global markets as concerns over Greeces unlikely but possible exit from the Eurozone have spurred caution among the already oil-worried investors.
The Syriza party, which is projected to win the elections on January 25, has promised to wipe out the majority of the country’s debt, while also leading Greece out of the 19-member region.
“Gold prices (are) continuing their rally spurred by strong investor demand for the bullion as a safe haven asset amidst the political uncertainty in Greece,” ANZ analyst Victor Thianpiriya said, cited by CNBC.
Another factor that boosted the yellow metals appeal as a hedge was weaker-than-expected US economic data reported yesterday. Manufactured goods marked a fourth monthly decline in November, additionally the services sector grew slower than expected in December.
Golds rally came despite a robust dollar, typically the two move in opposite directions. However, gains may be stopped by the release of Fed minutes later today, when investors will go over policy makers last meeting and look for clues on US monetary policy changes.
The US dollar index for settlement in March was up 0.32% at 92.030 at 08:30 GMT. The US currency gauge gained 0.13% on Tuesday, holding in a daily range of 91.930 – 91.415. A stronger greenback makes dollar-denominated commodities more expensive for holders of foreign currencies and curbs their appeal as an alternative investment, and vice versa.
Adding to the precious metals troubles, assets in the SPDR Gold Trust, the biggest bullion-backed ETF, fell 2.99 tons on Tuesday to 707.82 tons, its lowest since September 2008. Assets fell 11% last year compared to a 41% drop in 2013.
Pivot Points
According to Binary Tribune’s daily analysis, February gold’s central pivot point on the Comex stands at $1 214.8. If the contract breaks its first resistance level at $1 227.9, next barrier will be at $1 236.5. In case the second key resistance is broken, the precious metal may attempt to advance to $1 249.6.
If the contract manages to breach the S1 level at $1 206.2, it will next see support at $1 193.1. With this second key support broken, movement to the downside may extend to $1 184.5.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
