Bank of Japan's Kuroda Talks Stimulus

There are two things working against gold this evening. The first is the election results showing a wave election in favor of the Republicans which can be interpreted as a repudiation of Obama and his policies. Equities seem to like the results and are moving higher. In the current environment, rising stock markets work against gold.

The second item is the set of comments coming from Bank of Japan governor Kuroda. He is essentially confirming the view that deflation is the major concern of his Central Bank. Along that line, he has noted that "falling commodity prices are positive for the Japanese economy in the long run". Such comments undercut any reason to own gold in the mind of most investors.

Gold has responded accordingly by plunging below last week's low.

In trying to find support levels for the metal, I am forced to move to the long term monthly chart. Please note that gold has fallen to the first Fibonacci retracement level noted by the shaded ellipse. That comes in near $1155. Failure there and gold is set for a test, first of psychological round number support at $1100 but more critically, technical chart support near $1088.