On Wednesday, gold continued its local down move on the background of large-scale US dollar gains and dipped to the first really strong area of support.
It is quite curious that US currency is now showing straight firstly due to the weakening of other world currencies amid weak economical perspectives, or Central Banks decisions. Second it is resumed global risk-off mode that gives additional straight for USD dollar. Yesterday, the Australian dollar lost in price against US dollar more than 1.5%, New Zealand dollar followed the trend and lost more than 0.8%, finally European currency intensified the decline, amid weak statistical Germany data and dropped more than 0.3%.
Amid a stronger USD dollar, the yellow metal is shifting under stronger pressure. The factor that can somewhat ease the pressure for gold market is unstable situation in equities. Growing uncertainty in equities and risks for economic slowdown so far limits the chances for lower gold decline.
Today another speech of Fed Chairman Jerome Powell was in market spotlight. The speech practically did not have any impact , since it did not provide the markets with new information. In his speech, Jerome focused on the independence of the financial regulator from the influence of government administration and political parties.
Today, investors will follow the new data from EU, which may have an impact on the dollar. The Bank of England meeting results may also have a certain impact on the market, although no surprises from the regulator expected. From US news today, we can highlight speech of FOMC member FOMC Clarida.
On the chart we see development of bearish correction. First, there are no strong reversal signals so far but they can appear any time. Second, the correctional wave has not yet reached its main goal, a strong support area, formed around 1300. However we can we consider the possibility of entering the market at these levels and lower around 1300 as expect price movement up to the level of 1350.00.