- Metals continue to slide on rising yields and risk aversion.
- Gold rallied to $1,871, but returned below $1,860.
- Next support zone at $1850.
The Gold is falling and continues to pull back after trading above $1,900 on Thursday. The pullback is already over $50 and remains under pressure from rising Treasury yields and a stronger dollar.
Yields have moved away from the new highs in years reached on Monday, but the trend remains strong. The sale of US government bonds does not stop even despite the fall in equity markets. The Dow Jones falls more than 1.30% and the S&P more than 2%.
The The drop in gold is dragging avocado down to $21.80, the lowest zone since December. These downward tours are also favored by the rise in the dollar. DXY gains 0.25% and is closing in on 104.00 again, heading for the highest close since 2002.
Critical support at $1850
XAU/USD hit lows at $1,856 and then bounced back to $1,871, but only to come back close to daily lows, showing that the negative tone still persists.
The $1850 area is a key support that if it yielded, it would put the price at its lowest since February and towards the 200-day simple moving average at $1,834, close to $1,830, where the next important support is.
To the upside, $1870 is the first strong resistance. Further up is $1885 and a daily close well above it would improve the outlook for gold.
Technical levels
Source: Fx Street
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