Gold has fallen to an 80-week-low

Gold has fallen to an 80-week-low at $1.160, before showing the first reaction and rebounding to $1,180, with a quick pullback.

The environment remains strongly bearish for gold and the relatively easy breach of the support placed at $1,200 and $1,180 represents further negative signals.

In this phase, markets are not looking at gold as a safe haven, preferring instead other assets such as the US Dollar or the Yen.

Despite this, it is likely that the market overreacted to the US Dollar strength. If prices keep around $1,180, there is a good chance of seeing a consolidation between $1,180 and 1,200 for bullion.

The movement of the last few hours are quickly changing also the technical scenario: we now have a new support area at $1,160, followed by the more important level of $1,130, the 2-year low hit in December 2016, just a few weeks after Trump’s election.

Carlo Alberto De Casa,
Chief analyst ActivTrades

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