Gold hits 2.5 year low on fresh dollar’s rally
Spot gold falls to the lowest since April 2020 on Friday, with bearish acceleration being sparked by a combination of negative factors from fresh rise of the dollar to new 20-year high to signals that the Fed will stick to its aggressive stance and continue with large rate hikes in coming months that would lead the economy towards recession.
The yellow metal was down 1.5% for the day in early hours of the US session, joining the chain rection in the markets, sparked by rise of dollar.
Fresh weakness is on track to break below six-day consolidation range that would generate bearish signal and additionally confirm a double-top pattern on monthly chart ($2070/$2074) which was completed on firm break of key $1680 support zone (range floor / Fibo 38.2% of $1046/$2074 rally / 200WMA).
Bears are on track for the second consecutive weekly fall and focus targets at $1617/$1608 (50% retracement of $1160/$2074) / 55MMA).
Former congestion low ($1653) reverted to initial resistance, followed by falling 10DMA (1679) which should keep the upside protected.
Res: 1653; 1665; 1679; 1688
Sup: 1617; 1608; 1560; 1547