With Madrid threatening a curtailment of Catalonia’s autonomy if the province declares independence, gold received a boost from safe-haven buying amidst the current political turmoil in Spain. Risk sentiment also soured after Bank of Japan Governor Haruhiko Kuroda warned that investors may be underestimating the geopolitical risks that have the potential to trigger widespread financial market turbulence and put brakes on an otherwise healthy global economic recovery.
Strong demand from key consumer India ahead of the traditionally peak festive season could help provide the short-term catalyst for further upside momentum. From a technical standpoint, $1305 represents the immediate resistance, a break of which could see gold rally to $1315 an ounce. On the downside, $1298 is the key support zone, with the trend remaining upward as long as prices stay above the level.