Gold tumbled this morning on near-expected unemployment claims reported in the US while the dollar fell as well. This sharp sell-off to the high $1790s made gold look like it was in free fall, but price quickly bounced back and is hovering around the $1807 range at the time of writing this. Price is now fluctuating as investors wait for NFP new tomorrow.
Recent news of the Vice Chair of the Fed became more hawkish towards the USD and said that the Fed might start tapering by late 2021-early 2022, one year ahead of what they originally thought. This will usually follow up with a raise in interest rates. And investors might have been trying to price that in this morning when we saw that big drop. The metal may continue to dip or consolidate for some time if the dollar sees more demand in the near future. I think the $1790-1800 level is going to be hard to break under since it has served as major support in the long term, but it's hard to tell. I also think with inflation concerns still looming over the dollar, gold might have a chance to come back to test the $1820s again.
Gold on the 4H timeframe showing a bearish move as price crossed under a rising trend line from July. Price touched the $1790s before bouncing because this level serves as major support from April. A break below this level could lead to a further drop to the $1750s. However, the previous 4H candle showed some hard rejection from the lows which could signify a bottom here for the precious metal. Resistance at $1820 and $1830.
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