Struggling Gold 

 
Gold has been losing some of its luster with some metal traders in recent sessions, as the reality of poor economic conditions has caused the rally to sputter. The Fed and other Central Banks still have the printing presses rolling at full capacity, which may act as a buffer for the Gold market if prices begin to slide. If the recent bounce in the USD versus the Euro continues, it could trigger profit-taking. The fact that recent trading sessions have had much smaller ranges indicates that there is plenty of indecision amongst traders.

Fundamentals

Gold futures have stabilized above the 1750 level, unable to garner enough momentum to attack the 1800 mark. While Gold has found strength in fears over the EU debt situation, the same crisis figures to slash demand for commodities. The slower growth projections could act as a barrier to higher Gold prices. The US Dollar has also firmed against the Euro in recent sessions. If the Dollar firms against the Euro, this could have a negative impact on the Gold market. The Commitment of Traders report shows net speculative long positions of over 280k contracts, which makes Gold vulnerable to long liquidation.

Technical Notes

Turning to the chart, we see the December Gold contract consolidating just above the 1750 level. The preceding move higher suggests that prices may have a slight upward bias. The next upside barrier may be found at the 1800 level. The RSI remains overbought, suggesting the market may continue to consolidate or, possibly, pull back.