Gold turned bearish in September, falling below the major support area at around $1,680 and reaching $1,615.55 on my broker’s platform. But on Monday last week we saw a sharp reversal on the USD index DXY and the USD declined against all assets, sending Gold higher, pretty close to $1,730.

Although, sellers have returned as the USD retreat comes close to an end and Gold prices slipped more than 1% yesterday. Today, the unemployment claims report was a bit on the soft side, but nothing to worry too much about.

Gold H4 Chart – MAs Have Turned Into Support

Can the 20 SMA hold as support?

The economic numbers showed that the U.S. private employers stepped up hiring in September, suggesting that the demand for workforce remains strong, despite rising interest rates and tighter financial conditions. So, the FED still has room for more hikes according to this reasoning.

Gold is highly sensitive to increasing interest rates, particularly by the FED, as rate hikes increase the opportunity cost of holding non-yielding bullion. So, Gold sellers have returned and they testing moving averages now. Yesterday the 200 SMA (purple) held as support on the H4 chart, today they are testing the 20 SMA (gray). We went short on Gold, as sellers seem to be resuming control again.

Gold XAU Live Chart