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The US dollar again gained traction recently, and climbed not only against the currencies but commodity prices fell too. GOLD recently came under bearish pressure, as it broke an important support area. It looks like that sellers are in control at the moment and more downside is possible in the short term. There are several high risk events lined up during the NY session, which can trigger solid volatility moving ahead. Some important ones to keep an eye on are the US producer price index and retail sales data. Moreover, the fed beige book will also be published later during the late NY session.

There was a critical bullish trend line on the hourly chart of GOLD, which was breached recently. GOLD buyers managed to hold the downside around the 100 moving average, which also coincided with the 23.6% fib retracement level of the last leg from $1182 low to $1237 high. So, there is a possibility that GOLD might push a bit higher from the current levels, but it is likely to find sellers around the broken support area. After a short-term correction it is likely to head lower towards the 200 moving average, which is sitting around the 38.2% fib level. The hourly RSI is around the extreme level, which can take the prices higher but that can only be seen as a correction.

If the economic releases in the US miss the mark, then GOLD could gain traction and possibly break the last high of $1237.

Overall, one might consider selling rallies around the $12332 area as long as the prices stay below the last high.

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