Gold drops to 6-day lows
|- Correction in gold prices continues amid higher US yields and modest dollar gains.
- Gold suffers the worst slide in three weeks.
The yellow metal corrected to the downside after reaching last week the strongest level since mid-July at $1,243/oz. Price bottomed during the American session at $1,224 amid a stronger US dollar and also higher US yields.
The US dollar index rose modestly from 96.42 to 96.55 while the 10-year yield climbed to 3.10%. Both remained far from last week highs but recovered part of Friday’s losses.
After falling to $1,224 gold rebounded and trimmed losses. Near the end for the session was hovering around $1,228, down $5 for the day, the worst performance since October 8.
XAU/USD Technical outlook
“The metal remains in positive ground, with the downside limited according to readings in the daily chart, as the price remains above its 20 and 100 SMA, with the larger one heading lower and the shorter one aiming north below it”, says Valeria Bednarik, Chief Analyst at FXStreet.
According to her, the Momentum indicator advanced into overbought territory amid the positive daily opening, but the RSI eased and it was heading south at 57, leaning the scale toward the downside. “Shorter term, and according to the 4 hours chart, the bright metal is at risk of falling further, as it broke below a now flat 20 SMA, now acting as dynamic resistance at 1,231.70”.
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