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The US dollar assault continued during the last few days. Even, commodities were not spared, as GOLD traded to a new low of $1209 recently. GOLD is in the downtrend since the break of the $1280 level. It looks like the downtrend is not over yet, and it might continue trading lower in the short term. There is an important economic release scheduled in the US today i.e. the US manufacturing PMI will be released during the NY session. The market is expecting a minor rise this time around, and if the outcome exceeds the expectation, then the US dollar might gain traction in the short term.

There is a bearish trend line formed on the 4 hour chart of GOLD, which acted as a hurdle on numerous times. GOLD is again trying to recover ground after trading as low as $1209. However, there is a high probability that the precious metal buyers will fail to break the mentioned trend line. There is also the 50% fib retracement level of the last drop from the $1242 high to $1209 sitting around the $1224 resistance area. So, if GOLD trades closer to the mentioned area, then it is likely to find sellers. Only a break and close above the $1230 level might call for a short-term reversal.

If GOLD buyers fail to take it higher, then a failure might ignite a move lower towards the $1209 low at least. There is even a chance that GOLD might test the $1200 level in the near term if sellers gain control.

Overall, selling rallies might be a good option as long as GOLD is trading below the highlighted bearish trend line.

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Posted By IKOFX Technical Team: Online Forex Broker
Website: http://ikofx.com