Gold dumped as Macron & Le Pen head to runoffs
Gold gapped lower and extended losses to $1266; the lowest level since Apr 11 after Le Pen finished behind Macron in the first round of the French elections.
Relief for markets & for polls
The risk-on action could be attributed to the fact that the worst case scenario of Le Pen-Melenchon for the runoff has been avoided. Moreover, polls got it right this time and thus the results are not only a relief for the markets, but also for the polls, who had lost credibility following the Brexit and US election disaster.
The offered tone around the safe haven metal remains intact, despite the mild recovery to $1272/Oz. Another round of selling could be seen in early Europe and North American session.
The decline in gold goes well with the fact that US 10-year treasury yield is up close to 8 basis points.
Gold Technical Levels
Friday’s close was $1289. The bulls are down, but definitely not out… despite the drop to $1266 levels. This is because the metal still trades well above the 50-DMA, 100-DMA and 200-DMA levels. AT the time of writing, prices were hovering around $1273.
A break below 4-hr 100-MA line of $1268 could yield $1261 (support on 4-hr chart) and $1248 (4-hr 200-MA). On the higher side, breach of resistance at $1275 (session high) could see the metal fill the gap by moving higher to $1283 (4-hr 50-MA) and $1295 levels (recent high).