Oil was down over $3 a barrel and gold fell $30, hitting a low of 1358 before finding some support. Overnight, gold has successfully retested the lows and is currently trading higher at 1366.
The focus of the market has now switched to the FOMC meeting next week, where the Fed is widely expected to begin tapering back QE. Any delay or reduced tapering will give gold a boost and put the dollar under pressure, though this is likely to be shortlived as the reality is that tapering is here and QE will be scaled back over the next 12-18 months.
We also consider that there is a strong possibility of a "sell the rumour, buy the news" reaction in gold that will see gold move higher once QE tapering is formally announced.
Equities remain in bullish mode, with the S&P homing in on 1700 in seemingly unstoppable mood. The dollar remains muted after failing to follow through on last week's rally above 82 and looks vulnerable to further declines.
Today's video for subscribers looks at the recent action and some key areas of support and resistance.