Gold Falls 2 Days in a Row, But Holds at Critical $1,780 Level

A cursory glance at the gold market may not inspire much optimism as prices hover below the relatively bullish $1,800 level.

Gold Falls 2 Days in a Row, But Holds at Critical $1,780 Level. However, technical charts suggest that as long as the yellow metal doesn't break below $1,780, all may still be well for long positions in the market. As of Tuesday, neither the benchmark gold futures contract on the New York Comex nor the spot price of gold bullion had settled below that level. "The recent rally that took gold to $1,800 remains fairly intact as long as the closing level of $1,780 is not breached," said Sunil Kumar Dixit, chief technical strategist at SKCharting.com. The benchmark gold contract for December delivery on the Comex in New York fell $8.40, or 0.4%, to $1,789.70, contributing to Monday's almost 1% drop. The December gold price hit a session low of $1,786.05 on Tuesday. The spot price of gold bullion, which is more closely followed by some traders than futures, was down $3.69, or 0.2%, at $1,775.82 as of 15:55 ET (19:55 GMT). Spot gold hit a session low of $1,771.45 before rising. Gold may remain just below $1,800 until the release of the Federal Reserve's July meeting minutes on Wednesday. The Fed minutes took on increased importance after the July US employment report eased fears over the possibility of a recession. Inflation data released last week pointed to the biggest monthly slowdown in consumer price increases since 1973. Investors are currently pricing in a less hawkish Fed, with Fed funds futures indicating that officials are more likely to raise interest rates by 50 basis points at their late September meeting, rather than 75 basis points as at the last two meetings.