Breaking: Gold drops below key $1,800 area
|Gold is already down more than 1% on a daily basis and trades below $1,800 for the first time since January 10.
The unabated dollar strength following FOMC Chairman Jerome Powell's hawkish remarks continues to weigh heavily on the pair. Additionally, the latest data releases from the US seem to be allowing the greenback to continue to outperform its rivals. The US Dollar Index, which gained more than 0.5%, is sitting at its highest level since July, rising 0.7% on the day at 97.15.
The US Bureau of Economic Analysis reported on Thursday that the US economy grew by 6.9% on a yearly basis in the fourth quarter. This reading followed the previous quarter's expansion of 2.3% and surpassed the market expectation of 5.5% by a wide margin.
The technical outlook confirms that sellers dominate XAU/USD's action with the Relative Strength Index (RSI) indicator on the daily chart falling below 50. Additionally, the price is now below the ascending trend line coming from early December. Finally, gold is trading below the 200-day SMA and stays within a touching distance of the 100-day SMA.
A daily close below $1,805 (200-day SMA) could attract additional sellers and open the door for another leg lower toward $1,780 (static level).
Other levels to keep an eye on
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