Gold Drops Below $1,150 on Strong USD

Gold sunk below $1,150 per ounce on Wednesday to its lowest since mid-2010, opening the way for a fall to $1,000 as a surging dollar and stronger share prices weaken the investment case for non-yielding bullion.

Silver fell even harder to hit its cheapest since February 2010 at just above $15 an ounce.

Spot gold, which skidded to its lowest since April 2010 at $1,143.66 an ounce, was trading down 2 percent at $1,145.05.

Technical analysts said a test of the $1,000 level could be on the cards following a break of support at $1,150 an ounce, a key retracement of gold’s rally from its 2008 lows to its September 2011 record high at $1,920.30.

The metal has lost around $100 an ounce over the past week, rekindling memories of a stunning two-day drop last year that started a huge wave of divestment and a surprise double-digit annual price dive after 12 years of gains.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza