FXStreet (Mumbai) – Gold bulls suffered a knockout blow after prices plunged to a five year low of USD 1071.28/Oz, before paring back some losses to trade just above USD 1100/Oz.
Speculative selling in Chinese market
The sell-off in Gold is being blamed to 5 tonnes of bullion being dumped on the Chinese market. The ANZ bank confirmed the news, which pushed Gold to its lowest level since March 2010. Experts also believe, the speculative forces gained an edge on account of the low liquidity environment.
Bulls demoralized, Gold down 6% on a YTD basis
The metal has taken back part of its losses, although it is struggling to extend recovery above USD 1100/Oz. The US dollar did not move at the time Gold prices fell below USD 1100. So the move lacked fundamental news, despite which the bulls are struggling to recover losses. Moreover, the metal was already under pressure since March 2015 due to the rate hike talk in the US. As of now the metal is down 6% on a year-to-date basis.
Gold Technical Levels
The metal currently trades at USD 1105.80/Oz; down 2.3%. The immediate support is seen at 1100, under which the prices could re-test the daily low at 1071.28. On the other hand, resistance is seen at 1130 (Nov 2014 low), above which the prices could rise to 1150 levels.
(Market News Provided by FXstreet)