Gold drops from 6-day highs to test weekly lows
- Following a reversal in US yields, gold tumbles to test weekly lows.
- XAU/USD fails at $1430, finds support at $1415, remains in range.
Gold is having a volatile day, on the back of the European Central Bank meeting and US data. Initially, the yellow metal jumped to $1433.70/oz, the highest level since last Friday and then retreated sharply, falling to $1415.
As of writing, trades at $1420, marginally lower for the day. Price remains in a range, facing a strong resistance at the $1430 barrier and with a critical short-term support at $1415. A close above $1430 would clear the way to more gains while on the downside, the outlook favors more losses below $1415.
XUA/USD spiked higher when Mario Draghi, European Central Bank President, was speaking at the post-meeting press conference. The signals of the announcement of a stimulus package at the next meeting triggered a decline in European bonds and boosted gold. The reversal took place amid a rebound in US yields. The US 10-year rose from 2.02% (lowest since July 8th) to 2.10%, a 10-day high, leaving gold vulnerable.
Despite all the volatility, XAU/USD continues to move without a clear bias. Traders continue to anticipate what the Federal Reserve may announce next week. On Friday, Q2 GDP data in the US is due.
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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.
