Topic: Gold fell to annual lows more pressure to come
Gold keeps on trading under strong pressure updating year lows. Yesterday the market broke through the resistance level $1265 and moved down into operational space.
On Tuesday after three day corrective decline USD dollar reversed and returned to some growth. Looks like that fact together with technical consideration provided additional downward impulse for gold. Stronger USD dollar amid higher US treasury yields make the precious metal less competitive as the investment.
We should note the fact that traders ignore geopolitical factors for the most part. Growing global trade tension don’t support the gold market and no influence is provided. This fact indicates that gold traders are focused on economic factors despite the media opinion on that part.
Yesterday US dollar gained and recovered some ground lost earlier. Weaker than expected data on US consumer confidence was ignored by dollar and equity markets. Today markets expect another block of statistical data. We will analyze the durable goods data and pending home sales. FOMC representatives Quorles and Rosengren will speak today and probably will influence USD dollar as well as gold market.
The negative market background persists on the gold market and if USD dollar keeps on gaining that is the most likely scenario we will see more downward movement in the gold.
For technical picture yesterday the price broke the support 41265 and moved lower in the frame of descending channel. Breaking through 1265 will open the way to $1237. Technical indicators preserve downward direction and no reversal signs are observed.