Gold reverses dramatically and drops $40

An improvement in risk sentiment pushed gold sharply lower.
Volatility remains elevated across financial markets, Wall Street trims losses.

Matías Salord FXStreet

XAU/USD rose earlier today to test mutli-year highs at $1689 but it failed to break higher and the rally lost some strength. Recently it spiked to the downside falling more than $40 in a few minutes. It bottomed at $1642.

As of writing it trades at $1667, marginally lower for the day. The move lower took place amid a recovery of the greenback against majors and as equity prices in Wall Street rebounded, trimming losses. Volatility across financial markets remains elevated with sharp bounces.

The Dow Jones is down now just 2.12% and the Nadaq 2.41%. Crude oil collapses almost 9%. Emerging market assets are under pressure.

Technical levels

A consolidation below $1660 would suggest an extension of the bearish correction, with next support levels seen at $1648 and $1635. On the upside, the critical level continues to be the area around $1690, the multi-year high. Above the mentioned level, gold should test $1700.

XAU/USD

Overview
Today last price	1652.85
Today Daily Change	-20.49
Today Daily Change %	-1.22
Today daily open	1673.34

Trends
Daily SMA20	1608.67
Daily SMA50	1576.88
Daily SMA100	1527.5
Daily SMA200	1490.13

Levels
Previous Daily High	1674.68
Previous Daily Low	1633.98
Previous Weekly High	1689.4
Previous Weekly Low	1562.94
Previous Monthly High	1689.4
Previous Monthly Low	1547.56
Daily Fibonacci 38.2%	1659.13
Daily Fibonacci 61.8%	1649.53
Daily Pivot Point S1	1646.65
Daily Pivot Point S2	1619.97
Daily Pivot Point S3	1605.95
Daily Pivot Point R1	1687.35
Daily Pivot Point R2	1701.37
Daily Pivot Point R3	1728.05

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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