Gold breaks the early morning low, moves below $1,640
The violent move higher in gold to start the week is faltering as price has undone all the good work from yesterday in a move to fresh session lows under $1,640 today.
Notably, we are seeing sellers drive price towards the 100-hour MA (red line) @ $1,633.58 and a break below that will be a key risk for buyers in trying to keep the upside momentum going on the week.
You can attribute this to a retracement or profit-taking activity but as we move towards a test of key near-term levels, the pullback should not be underestimated.
Calmer heads are prevailing after the risk meltdown yesterday and that is also working against gold in terms of near-term momentum today.
US 10-year yields are back above 1.40% to start European trading and a further retracement there would spell more pain for gold in the session ahead. That said, sentiment remains fragile but just be mindful of the potential key near-term technical break above.
