March 15, 2016. After failing on a third attempt to close above $1,280 at the end of last week, gold has spent the last three consecutive trading days trending lower. It held support at $1,225 overnight, the fifth point on a trendline dating back to mid-January, but the momentum has certainly shifted downward this week. Should this $1,225 level break, the next support area to watch for would be the psychological figure of $1,200.
Indian customs data on Monday showed that imports of gold in February totaled just 765,000 toz. This was down over 60% from the previous month and the lowest monthly inflow on record. After China, India is the world’s largest gold market and the steep decline in demand can be attributed to gold’s impressive performance in 2016 as well as Indian jewelers’ reaction to a recent 1% excise tax imposed by the government.
The FOMC statement is out tomorrow at 11 AM PST.
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Chief Market Analyst, ITM Trading