Gold breaks consolidation range and drops back below $1,200

  • Yellow metal breaks to the downside amid a stronger US dollar and EM tensions.
  • XAU/USD hit the lowest since last Friday under $1,200.

Gold weakened after the beginning of the US session and fell to $1,196/oz hitting the lowest level since last Friday. From the lows rebounded and as of writing was hovering around $1,200. The short-term momentum was still biased to the downside, despite moving off lows.

After moving in a consolidation range between $1,200 and $1,207 for almost two days, the yellow metal broke lower. The move to the downside has been limited so far. A consolidation below the figure could point to more losses.

The move lower took place amid a stronger US dollar across the board and particularly against emerging-market currencies. Versus the Argentine peso, the greenback gains more than 10% and 4.50% against the Turkish lira. In Wall Street, equity prices were down. The Dow Jones Index was falling 0.45% and the S&P500 0.35%.

Technical levels

To the downside, support levels might be seen at $1,196 (daily low), followed by $1,192 and $1,182. On the upside, resistance could be located at $1,201 (Aug 22 high), $1,207 and $1,214.

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