Five-day rally in gold sharply reverses on Lebanon ceasefire report

Gold and oil are under pressure on a report that Lebanon and Israel are near a ceasefire. I’m surprised at the size of these moves as a ceasefire has been close for weeks. In any case, gold is down around $40 on the news and oil down $1.50, both unwinding a big part of last week’s impressive moves.

As for gold, the sharp selling today (if it lasts) emphasizes the top at $2790 in October.

Obviously, today’s candle isn’t a good look but I don’t like the idea that the gold rally is over on a Middle East story, let alone on a day when the US dollar is soft and as Chinese stocks get washed out yet again.

This article was written by Adam Button at www.forexlive.com.