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FXstreet.com (Barcelona) - Capital flows coming from the US pushed the XAU/USD to a $10 fall down to $1720 low as the New York session was ahead. The market bounced to 1723/1726 area as the session got underway and the US consumer spending and Chicago PMI were released.

The US Chicago PMI expansionary but disappointing figure at 50.4 in November, coming from 49.9. Consensus was for 51.2. Also, RBC cut the US Q4 GDP (YoY) growth estimate from 1.0% to 0.2% based on weakening consumer spending in Q4 and the effects of Hurricane Sandy. Market consensus points to 1.7%.

"Mixed signals on near-term studies show room for further recovery and test of important 1735/38 barriers on hourly chart, while 4h chart indicators still hold in the negative territory and lacking momentum, as 55 day EMA caps for now", wrote Windsor Brokers analyst Slobodan Drvenica, expecting a rise to 1738 and 1741 in case of a break above 1735. "While slide below 1720/17 supports would signal an end of recovery phase and shift focus back to 1705", Drvenica added.

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