Gold - Risk reversals adopt a bearish bias

Gold (XAU/USD) fell to $1271.64 this Wednesday morning in Asia; its lowest level since Oct. 6.

Risk reversals indicate the sentiment in the options market has turned bearish.

The one-month risk reversals gauge fell to -0.05 on Tuesday and have extended the decline to -0.075. The negative print indicates increased demand for the XAU/USD put options (bearish bets). Meanwhile, the one-week risk reversals gauge fell to -0.875 today; its lowest level since September 22.

Gold Technical Levels

Mohammed Isah is bearish in gold - On the downside, support comes in at the 1,270.00 level where a break will turn attention to the 1,260.00 level. Further down, a cut through here will open the door for a move lower towards the 1,250.00 level. Below here if seen could trigger further downside pressure targeting the 1,240.00 level. Conversely, resistance resides at the 1,290.00 level where a break will aim at the 1,300.00 level. A turn above there will expose the 1,310.00 level. Further out, resistance stands at the 1,320.00 level. All in all, GOLD looks to weaken further lower.