Gold drops to lowest in almost two weeks, near $1710
- XAU/USD extends slide amid risk appetite, retreats further from multi-year highs.
- Gold testing 20-day moving average around $1715/oz.
Gold prices extended losses after the beginning of the American session and bottomed at $1709/oz, the lowest level since May 13. It is hovering around $1712, down $15 for the day so far.
The decline took place as equity prices rally in Wall Street. The Dow Jones gains 2.35% while European markets posted gains of 1.65% on average. The surprise regarding gold’s performance is related to the US dollar. The greenback is falling sharply across the board, and it is even losing ground versus the Japanese yen. Usually, XAU/USD benefits from a weaker dollar, but it is not the case on Tuesday.
Technical levels
From a technical perspective, the outlook for gold in the short-term deteriorated further after breaking under $1720, the lower bound of the recent consolidation range.
The area around $1710 capped the slide, a break lower would expose the next critical support around $1700 that if broken, could trigger a bearish acceleration. On the upside, $1720 could be seen as the immediate resistance followed by $1735 (May 26 high).