The pullback is getting violent
Gold has fallen to a low of $1,907 on the day as the sharp fall continues following futures touching over $2,000 earlier in the day. Meanwhile, silver is tailing off to a low of $22.32 or down by 9% after having touched just above $26 in Asian trading earlier.
As mentioned yesterday, the $2,000 mark may be a bit of a stretch for gold given how rapid the rise has been since firmly breaching the $1,800 level at the start of last week.
Historically, the parabolic moves in the commodities space tends to lead to violent pullbacks and today is but an example of that. For some context, the high for gold today was $1,981 and we are trading nearly $70 below that now.
From the chart, the 100-hour MA (red line) near $1,900 will be a key line in the sand to watch. I would expect dip buyers in gold and silver in the bigger picture, but a drop back under $1,900 isn't quite out of the picture for the time being.
If anything, there will be stronger conviction for buyers to reload on longs nearer to $1,850 and even more so if we see a pullback to $1,800 down the road.
The push lower in gold and silver is adding to the slight dollar momentum on the session with EUR/USD now down to 1.1712 and GBP/USD down to 1.2838.
