⚡ Easily Trade – Apple, Microsoft, Tesla and Google Stocks – Open a FREE Account Here

      

XAU/USD: Gold Drops $65 per Ounce – Biggest One-Day Loss Since November 2023

Gold drops nearly 3%

Gold has its worst day since last November 23, dropping more than 2.7% from the open. Risk-off sentiment at newly found all-time highs and geopolitical risks in the Middle East faded.

XAU/USD recently reached an all-time high mostly due to central bank buying, increased industrial demand and an easing Fed outlook. However, the latest rally to its all-time high came on the back of rising tensions in the Middle East.

BrokerReviewRegulatorsMin DepositWebsite
🥇Read ReviewASIC, FSA, CBI, BVI, FSCA, FRSA, CySEC, ISA, JFSAUSD 100Visit Broker >>
🥈Read ReviewFMA, FSAUSD 50Visit Broker >>
🥉Read ReviewFSCA, CySEC, DFSA, FSA, CMAUSD 0Visit Broker >>
4Read ReviewCySEC, MISA, FSCAUSD 5Visit Broker >>
5Read ReviewFCA, CySEC, FSCA, SCBUSD 100Visit Broker >>
6Read ReviewFCA, FINMA, FSA, ASICUSD 0Visit Broker >>
7Read ReviewCySEC, FCA, FSA, FSCA, Labuan FSAUSD 100Visit Broker >>
8Read ReviewCBCS, CySEC, FCA, FSA, FSC, FSCA, CMAUSD 10Visit Broker >>
9Read ReviewASIC, CySEC, FSCA, CMAUSD 100Visit Broker >>
10Read ReviewIFSC, FSCA, ASIC, CySECUSD 1Visit Broker >>

The attack from Iran on Israel gave the market some buoyancy as investors were fearing the worst from a possible escalation in the conflict. Now it seems those risks have subsided, and the market is looking to take back some profits.

Despite today’s decline gold fundamentals are still in place. Jewelry is still strong, especially in countries like India or China. While central bank buying, although hard to predict, seems to be steady.

Technical View

The day chart for XAU/USD shows how toady’s sharp drop stands out compared to previous candles. To get a longer candle than today’s you need to go back to November 23 (last candle on the chart). The longer a candle the greater the likelihood of the trend continuing.

Xau/USD drops $65 dollar per ounce in one day, geopolitical risk subsides

WE already have some indications that a correction may be about to take place. Today’s candle has brought the RSI below the 70 level, which is usually consistent with signaling a correction. However, we are already close to the support level (red line) of $2,318.

So, we may get some consolidation here as the market finds its bearings. A break below that support would open up the possibility of further declines to the next support level (green line) at $2,264. While a bounce off the support line would meet resistance at the all-time high of $2,431.

XAU/USD
Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
ABOUT THE AUTHOR See More
Avatar
Gino Bruno D'Alessio
Gino D’Alessio is a professional Forex trader with 20+ years of experience in the financial markets as a broker-dealer. Having worked in New York and London, Gino is regularly featured on Seeking Alpha. He completed the CAIA program in 2015, which also gave great insight into global macro factors. His main focus is FX majors, indices and commodities.
Related Articles