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Gold breaks 200-Day MA at $1270

Market Analysis

Gold, H1

Gold dropped to three-week lows of $1,267.16 from near $1,277.00, with the timing of the move reminiscent of other recent spiky moves. No confirmation so far, but the sell order may have been related to the London fix, which comes at 10:00 EST. Dollar strength this morning has been a contributor to gold weakness this morning.

The breach and break of the 200-Day MA, which sufficiently supported the commodity since Early October, consider being a significant key level for Gold, with weakness increasing on the anticipation of US Non-Manufacturing ISM. The price action has been seen slightly up on the release of U.S. trade deficit, which widened 8.6% to -$48.7 bln in October. The larger than expected US Trade Deficit, push gold by nearly $2 up, however ahead of the last US data for today,  Gold weakened by nearly $7, the last hour. U.S. Markit services PMI decline by 0.8 points,  added further sell pressure on Gold.

The next intra-day support areas for Gold come at October’s low  between $1260.00- $1262.00, while the Daily support is set at $1255.00. The RSI is 41 and falling, MACD is slightly below neutral, while the parabolic SAR remains negative since November 29.  Therefore bears seems that they are gaining the control of Gold, while only a reversal over 50-Day MA at 1283-1285.00. would negate this downwards move.

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Andria Pichidi

Market Analyst

HotForex

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