Today gold has resumed its decline after a small correction, seen yesterday when Fed released its comments the US monetary policy. The price hit the low at 1082.12.
In the Statement, the Regulator indicated a steady decline in the unemployment rate, as well as positive dynamics in the housing sector. However, due to low inflation rate, the target level of 2% will not be reached in the short term. Thus, market participants still expect an interest rate rise this September.
Today, US preliminary GDP is released which is expected to grow to 2.6%.If the actual figure complies with or exceeds the forecast, it will significantly support the US currency which, in turn, will lead to further decrease in commodity prices.
Support and resistance
Levels of support: 1077.32 (24 July low), 1065.00 (lower MA of Bollinger Bands), 1050.00 (psychologically important level), 1044.26 (5 February 2010 low).
Resistance Levels: 1090.22 (yesterday low), 1105.70 (23.6% Fibonacci) 1124.66 (middle MA of Bollinger Bands, 38.2% Fibonacci), 1139.00 (50.0% Fibonacci).
Open short positions from 1177.00 with targets at 1166.00, 1151.00 and stop-loss at 1180.00.
Open long positions from 1090.70 with targets at 1105.00 and 1120.00 and stop-loss at 1086.00.