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  • XAU/USD falls by almost 3% on Friday, falls $100 from weekly highs.
  • US dollar up marginally on a relatively quiet session among currencies.

Gold dropped further and bottomed at $1849, hitting the lowest level since December 16. The area around $1850 offered supported and as of writing the metal trades at $1856, down by 2.80% on the day and more than a hundred dollar below the weekly high it reached on Wednesday.

The sharp reversal in gold accelerated on Friday after the breakout below $1900. Initially, the area at $1875 capped the decline and after a minor bounce, another sell-off following the US employment report it tumbled further.

The technical outlook has changed dramatically for gold. Now, attention is set on the $1850 area, and a consolidation below would keep the bearish pressure intact. The next support levels are seen at $1840 and $1820.

XAU/USD continues to be on the defensive. A recovery above $1875 would alleviate the pressure and only a rebound back above $1900 could change the bias.

On a weekly basis, gold is about to post a decline of around 3% and a close consolidating a sharp reversal, pointing to further weakness. The ongoing decline followed the failure at $1960 days ago.

Technical levels