Gold fell more than one per cent to a 10.5 month low on Thursday after the US Federal Reserve sounded an unexpectedly hawkish note on US interest rates, sparking a surge in Treasury yields and sending the dollar to a 14-year high.
Gold prices were ending the U.S. day session sharply lower and fell to another 10-month low Thursday. Silver prices also got hit very hard to the downside and hit an eight-month low. A powerful rally in the U.S. dollar index and a more hawkish Federal Reserve worked to pummel both metals. February Comex gold was last down $32.90 an ounce at $1,130.50. March Comex silver was last down $1.191 at $16.03 an ounce.
Technically, February gold futures prices closed nearer the session low today. The gold bears have the solid overall near-term technical advantage and gained more power today. There are still no early clues of a market bottom. Prices are in a six-month-old downtrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,168.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,100.00. First resistance is seen at today’s high of $1,146.00 and then at $1,150.00. First support is seen at today’s low of $1,124.30 and then at $1,115.00. Wyckoff's Market Rating: 1.5
Chris Beauchamp, market analyst at IG Markets,, said that he is watching the $1,122 level and a break of that could lead to test of support at $1,106.
George Gero, director of RBC Wealth Management, said that not only is the Fed weighing down on gold but physical purchases in India has dried up, during what is an extremely important time for seasonal demand.
Reference: Business News, Kitco
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