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.

Matías Salord FXStreet

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.

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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