- Hawkish Fed speak continues to pressure gold
- Two key technical support levels broken today
- Gold trading at a six month low
Gold continues to drift lower after breaking below $1,900, a key area of support in recent weeks.
The yellow metal had been range-bound between $1,900 and $1,950 around the major central bank meetings this month and it would appear a hawkish Fed when others have adopted a more neutral tone has pushed it over the edge.
The dollar has been charging higher over the last week and weighed heavily on gold. It’s not looking good for the yellow metal though, with the insistence that rates in the US could rise again and stay there for longer far from ideal.
A bearish breakout for gold
In the last 24 hours, gold hasn’t just broken below the 200/233-day simple moving average band, it’s also broken the August lows in what looks quite a bearish development.
Source – OANDA on Trading View
It’s now trading at its lowest level since March and traders will be wondering just how low it can go. The next level that stands out is $1,860 where we’ve seen it run into support and resistance on numerous occasions in the past.
But today’s move may suggest a deeper correction is on the cards, especially if the Fed is going to maintain this hawkish position while other central banks pivot to something more neutral.
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