Gold drops further to test $1200

Gold remains under pressure, trading near $1,200/oz.
Wall Street falls sharply and US Dollar consolidates gains.

Matías Salord FXStreet

Gold slide further and reached a fresh daily low at $1,202/oz the lowest level in four weeks. The yellow metal is falling for the seventh-day in-a-row. A week ago was testing the key resistance area seen around $1,235 and now appears to be headed for a test of $1,200, making a significant reversal.

A stronger US dollar across the board and a negative risk sentiment pushed gold prices further to the downside on Monday. The US Dollar Index (DXY) extended gains above 97.00 and rose above 97.30, reaching the highest level in 17 months. In Wall Street, the Dow Jones was falling more than 1.30% and the Nasdaq 2.35%.

Federal Reserve monetary policy expectations continue to be a key driver for the greenback. A rate hike in December is expected and between two and four rate hikes in 2019.

XAU/USD Levels to watch

To the downside, support levels might be seen at $1,200 (psychological), $1,192 and $1,180 (Sep low). On the upside, the immediate resistance could be located at $1,206, $1,211 and $1,218.

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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