Spot gold prices collapsed yesterday afternoon following Fed Bernanke’s testimony which pointed to little chance of further QE, along with some stronger employment/ Chicago PMI data, which sparked a wave of profit taking by bullion traders after the metal posted highs of $1790.80 in Europe. Gold plunged over $100 to lows of $1688.50 before edging up into the close at $1697.00. Asian markets this morning have attempted a repair to the damage with some small risk filtering back in via the euro-dollar and the aussie on the back of stronger Chinese PMI, and some dip buying from investors in the metal. Gold has picked up some $28 to $1725 this morning and currently sits around $1719 ahead of the european open. Support today now rests at $1693.30 (100 day MA), yesterday’s lows of $1688.50 and $1649. Resistance is seen towards the 14 day MA of $1743.85 and $1761.60, with a break there pointing up to the start of the sharp drop around $1785.
EasyForexNews Research Team