By FX Empire.com
Gold prices extended their gains on Monday, as optimism EU leaders will reach a resolution to the euro zone debt crisis, in addition to better than expected growth in Chinese manufacturing activities boosted demand for higher yielding assets and put downside pressure on the U.S. dollar, which provided gold prices with some bullish momentum. Nonetheless, gains were limited as fears emerged that the euro zone economy could fall in recession after data from the services and manufacturing sectors showed contraction in October.
The outlook for gold remains generally to the upside, however, we still expect volatility to continue to dominate gold prices over the short term, and that could still weigh down on gold prices, but overall, our general outlook for gold prices remains to the upside. The focus in markets will remain on Europe, as traders wait for the final resolutions that will be provided by EU leaders.
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