The precious metal has been put in the spotlight following a considerable sell-off in recent weeks, falling from $1,344.95 in mid-July to trade at $1,131.82 an ounce in early November, a level not seen in over four-and-a-half years.

Gold has been suffering from a strong sell-off in this quarter, with investors having a bullish sentiment of improving economic performance in the USA following strong readings of market data and, therefore, opting to hold riskier assets. The precious metal’s price has also been hampered by a strong US dollar, after the Federal Reserve completed its quantitative easing programme, indicating the economy is now in a stable environment to recover. This has been represented by the S&P 500 and Dow Jones Industrial Average reaching all-time-highs in recent weeks.
On Friday, Gold managed to trade above $1,200 to reach $1,203.59 an ounce, its highest in three weeks, after a surprise interest rate cut by China fuelled hopes that demand would rise in the world’s biggest consumer of the metal. The commodity was aided further by remarks from the European Central Bank’s President, Mario Draghi, that they are open to exercise drastic measures to prevent the Eurozone sliding into deflation, and that it has begun buying asset-backed securities.
Since Friday’s rally, Gold has been trading steadily below $1,200 an ounce after the dollar strengthened and traders are eyeing the upcoming key event for the precious metal, the Swiss referendum vote.
The Swiss referendum comes into focus as the people of the nation will go to the polls on the 30th November to decide whether its central bank is to be required to hold 20% of its reserves in the form of gold, compared with 8% in the previous month.
The impact of a ‘yes’ vote could boost the yellow metal price, however, as the vote has been demanded by the right-wing Swiss party, it is the consensus that the price rise could be short lived as it wouldn’t be a central bank decision, and that other central banks will not follow the same strategy.

Traders will be keeping a close eye on the direction gold will be heading, with some key levels coming into focus. In recent days, gold has been trading above $1,190.00, above its next significant support level of $1,181.85. Keeping above this level indicates that there is possibility for there to be a bullish sentiment, with the next level to be tested being $1,213.05. A break above this level extends the upside move, and breaking beyond $1,181.85 brings back the downside move again.

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