Gold takes tumble on stronger dollar

The Chicago PMI data for October wrong-footed the markets and has helped to give the dollar a boost. 

Gold, which has been under pressure all day as a result, reacted negatively but remains anchored around the key $1325/oz mark.

A rise to 65.9 for the Chicago business barometer against an expectation of 55.1 put the markets in a quandary. All markets, including gold, have recently been relying on the taper on/taper off sentiment as a driving force; decent fundamental data such as this has been something of an anomaly.

The 144-day moving average for gold has once again stolen the shine from the metal, and seen gold trade back from the $1360/oz resistance level. As long as we see the price close on a daily basis at or above $1325, then we can shrug the current development off as a correction. Any break, on the other hand, could re-open the $1300 level.

Spot gold chart

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