- Gold breaks 4-day range with a significant slide.
- The technical outlook remains vulnerable with the price near key support seen at $1180/82.
The yellow metal suffered a significant drop on Monday, losing $15. It opened above $1200/oz and bottomed at $1183, the lowest level in a week. During the American session moved off lows, but the recovery was limited.
It was about to end the day hovering around $1187, posting the second lowest close since August 23. Higher US yields pushed gold prices to the downside, breaking the negative correlation with USD/JPY. The yen strengthened amid risk aversion but not gold, that was hit from the reserve ratio cut from the Chinese central bank
Gold Technical outlook
“The daily chart for spot shows that it currently stands at the lower end of its latest range, having fallen below a still directionless 20 DMA while technical indicators gain downward traction in negative ground, favoring another slide on a break below 1,180.58, September 28 low and the immediate support”, said Valeria Bednarik, Chief Analyst at FXStreet.
In the short-term, according to her, the 4 hours chart, shows XAU/USD offering a clear bearish stance, “as technical indicators maintain their strong bearish slopes near oversold readings, while the price is now developing well below a congestion of moving averages some $15.00 above the current level.”
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