Gold’s Price Under Heavy Pressure, Taps Key Support
The price of Gold has been pressured for the past 2 weeks, as commodity prices have fallen, as the Fed signaled more rate hikes, the USS staged a nice relief rebound, and persistent risk appetite in the equity markets slowed demand for Gold.
This confluence of factors weighing on the precious Yellow metal has pushed price down to a Key uptrend support line extending back to the December 2016 lows.
As a non-yielding, USD-denominated, safe-haven instrument, Gold has fallen under the weight of market dynamics, resulting in a pullback since early June.
The pullback brought price down from a failed approach/re-test of the Key psych price at 1300, to its current breakdown below the 1250 prior support mark.
Despite the pullback the general YTD uptrend remains intact. This will change if a breakdown below the uptrend line happens.
On continued Fed hawkishness propping up further rate hike expectations, the USD remains supported, whil Gold remains pressured.
Further, the progressively higher runs to record-highs in equities’ demand that Gold demand could continue to soften in the absence of any new major risk concerns.
So, for now, the price of Gold has the potential to break down further. In the event of a breakdown below the trend line support, the next major downside target is around the 1215, which represents the May 2017 lows, followed by the Key 1200 psych support mark.
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