• Gold prices rally but easing Italian budget fears may stem further gains
  • Crude oil prices mark time at key resistance after Iran-linked upswing
  • EIA inventory data may pass quietly if outcome echoes API projection

Gold prices surged as turmoil in Italy soured risk appetite, weighing on bond yields and boosting the relative appeal of non-interest-bearing assets epitomised by the yellow metal. The markets scrambled after Italian lower house budget committee head Claudio Borghi said Rome could solve its fiscal problems if it were to have its own currency. Crude oil prices languished in digestion mode after yesterday’s fireworks.

GOLD MAY FALL IN RISK-ON TRADE, EIA DATA ON TAP

Looking ahead, an upturn in risk appetite may send gold lower anew. Prices held up in Asia Pacific trade as Italy stepped back from the brink, triggering a surge in EUR/USD that echoed as broader US Dollarweakness. That helped underpin anti-fiat alternatives but support may evaporate as ebbing Eurozone instability worries boost yields and reinforce Fed rate hike prospects. Indeed, S&P 500 futures are pointing upward.

GOLD TECHNICAL ANALYSIS

Gold prices launched sharply higher to retest defining resistance in the 1211.05-14.30 area (range top, trend line from mid-April). A daily close above this barrier would neutralise the near-term bearish bias and open the door for a retest of the 1235.24-41.64 zone. Alternatively, a move below the September 28 swing low at 1180.86 exposes the mid-August bottom at 1160.37.

Gold price chart - daily

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