Gold tumbles to $1550 as Wall Street gains sharply
- Higher US yields and a rally in US markets weigh on XAU/USD.
- Gold drops $20, having the worst day in a month.
On Monday, the price of the ounce of gold peaked at $1593 before reversing direction dramatically. Recently, XAU/USD bottomed at $1551, the lowest level in 13 days.
The metal is falling for the second day in a row, as it continues retreating. On Tuesday it broke a short-term uptrend line (lower limit of a bullish ascendant channel). As of writing, it trades at $1552; it is testing the $1550 area. Below the mentioned level, the next support might be seen at $1545. To the upside, now $1563 is the immediate resistance. Then comes $1570; a consolidation above would remove the bearish pressure.
The slide from the peak pushed the price below the 20-day moving average (currently at $1559) for the first time since mid-December, leaving the yellow metal vulnerable, from a technical perspective to more losses.
Strong US dollar, Wall Street recovers
In the US, Equity prices continue to rally. The Dow Jones gains 1.70% and the Nasdaq climbs 1.85%. US yields are also on the rise. The 10-year yield rose to 1.60%, highest since January 29.
The improvement in sentiment weighed on gold and also the yen and the Swiss franc. The greenback falls versus commodity and emerging market currencies, but the DXY is up, fully recovered from Friday’ losses. It is hovering around 98.00.
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