- Gold drops to an SMA support as the dollar gains.
- A break below the SMA may invite stronger selling pressure.
Gold is feeling the pull of gravity on Friday, with the US dollar showing signs of life amid the steepening of the treasury yield curve.
The yellow metal almost tested the 200-hour Simple Moving Average (SMA) support at $1,908 soon before press time. The SMA has restricted downside multiple times since Wednesday.
Acceptance under the 200-hour SMA would signal a continuation of the sell-off from the Jan. 6 high of $1,959 and expose the hourly chart support at $1,890.
Alternatively, a bounce from the 200-hour MA, followed by a move above $1,927 (hourly chart hurdle), would signal an end of the pullback and allow a re-test of recent highs.
Trend: Bearish below 200-hour SMA