Gold was under pressure all day yesterday, the sell off accelerating as the afternoon wore on, with gold falling $30 before the market found support at 1557. Overnight, gold has fallen further, testing support at 1554 and currently trading around 1558. The market is looking vulnerable to further price falls from here.
At first it was unclear why the heavy selling had been triggered, before online rumours started appearing that the FOMC minutes, due to be released at 7pm UK time, had been "leaked" early. This was soon confirmed and the hawkish nature of the minutes explained the sell off to some extent.
However, the Fed meeting pre dates the string of weak economic data from last week, particularly the terrible Non Farms Payroll number, so it is very likely that the Fed's stance will have softened somewhat since that March meeting.
The break below 1560 suggests a retest of 1540 is on the cards and if that level falls, major support at 1525-1530 looms back into view. First resistance comes in at 1563-1567, though the market will have to get back above 1590 to get the bulls in confident mood. However, it will not be time to declare the correction over until 1620 is broken.
Today's video for subscribers looks at the trading action from yesterday in more detail and our strategy for our next trade.
At first it was unclear why the heavy selling had been triggered, before online rumours started appearing that the FOMC minutes, due to be released at 7pm UK time, had been "leaked" early. This was soon confirmed and the hawkish nature of the minutes explained the sell off to some extent.
However, the Fed meeting pre dates the string of weak economic data from last week, particularly the terrible Non Farms Payroll number, so it is very likely that the Fed's stance will have softened somewhat since that March meeting.
The break below 1560 suggests a retest of 1540 is on the cards and if that level falls, major support at 1525-1530 looms back into view. First resistance comes in at 1563-1567, though the market will have to get back above 1590 to get the bulls in confident mood. However, it will not be time to declare the correction over until 1620 is broken.
Today's video for subscribers looks at the trading action from yesterday in more detail and our strategy for our next trade.