Gold drops sharply from 9-week highs, NFP eyed

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 8, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Mumbai) - The yellow metal witnessed a sharp retreat from multi-week tops reached earlier in Asia and now slips back below 1100 threshold amid risk-on rally in equities and a broadly higher USD.

    Gold dips from 1112.20 highs

    Currently, gold drops -0.76% to 1099.30, recovering from fresh session lows struck at 1098.40 few minutes ago. Gold prices failed to sustain at more than 2-month highs and ended a four-day rally, falling steeply almost $ 12 so far this session.

    The bullion experienced a sharp sell-off after the Chinese authorities intervened to support the yuan and also set a lower yuan fix earlier today, and thus, calmed unnerved China’s stock markets. This PBOC move helped restore investors’ confidence somewhat and markets gave up safe-havens such as gold in favour of the equities.

    Moreover, a firmer greenback on the back of re-emergence of risk-on trade and also ahead of the US NFP data, further weighed on the gold prices. The US dollar index now trades 0.55% higher at 98.84.

    Gold Technical Levels

    The metal has an immediate resistance at 1109.50 (Nov 6 High) and 1112.20 (daily high). Meanwhile, the support stands at 1096.40 (1h 50-SMA), below which doors could open for 1091.60 (Jan 7 Low).
    For more information, read our latest forex news.

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