Gold prices consolidated for a second straight trading session following a large drop on Friday in the wake of the stronger than expected U.S. payroll report. On Monday, there was a report that said that the ECB was preparing for a drop in its deposit rate from the current level of -0.2%, which would further undermine the value of the Euro. French IP also declined which make the dollar more attractive eroding golds value.
French industrial production rose 0.1% month over month in September, against expectations for a correction from the 1.7% month over month jump in August. Manufacturing production was unchanged over the month, after jumping 2.2% month over month in the previous month.
Support on gold prices are seen near the July lows at 1,076, while resistance is seen near the 5-day moving average at 1,098. Additional resistance is seen near the recent breakdown level at 1,120. Momentum remains negative with the MACD printing in the red with a downward sloping trajectory. The only caveat is that the RSI (relative strength index) is printing a reading of 28, which is below the oversold trigger level of 30 and could foreshadow a correction.