The metal lost 4% at yesterday’s session closing below the level of 1100.00.
About 3.3 million physical contracts for the metal were traded on the Shanghai Gold Exchange. In the South Africa, the mining sector waged negotiations resumed on Monday.
The world’s largest gold ETF, SPDR Gold Trust holdings, faced a decline in output of 0.26% to 694.46 tons compared to the previous day.
China official Gold reserves hit the level of 1658 tons at the end of the previous month. This was the first reported increase in 6 years.
Indian government curbs gold imports. India is the second largest customer of the precious metal after China. The rural economy has been struggling for a while in India. This factor influences gold sales along with two-wheeler, tractor, and FMCG sales.
The nuclear agreement with Iran depresses commodities like gold and crude.
Barclays says if the price of gold falls below $ 1,100.00, gold production will be vulnerable.
Technical forecast: In the weekly chart, the metal manage to hold the channel support trend line finds at $1,085.00.
The metal has been reaching lower highs and lower lows breaking below a large bearish head & shoulders pattern. In all time frames, the precious metal lost all moving averages.
At yesterday’s session, we advised to refrain from fresh selling. Selling accelerates only below $1,085.00. Selling on a rise is likely to be profitable.
Intraday support is found at $1,094.00 and $1,085.00. Resistance is seen at $1,108.00, $1,120.00, and $1,134.00. The weekly support is found at $1,085.00, $1,068.00, and $1,060.00. The metal is likely to test $1,068.00 initially and $1,045.00 and $1,005.00 later. The level of $9,65.00 is likely to be hit in the next 6 months in the extreme case. The strong supply zone is seen at $1,134.00, $1,142.00, and $1,163.00. A weekly close below $1,085.00 opens gates to $1,063 and $1,045.00 in the near term.
The material has been provided by InstaForex Company – www.instaforex.com