Gold on course for its worst monthly drop since November 2016
At one point yesterday, the drop in gold threatened to turn real ugly but it managed to turn things around to close above the 29 April low @ $1,756.13.
That said, the coast isn't clear yet for gold. It is down by nearly 8% this month, staying on course for its worst monthly performance in nearly five years.
The technical picture isn't too pretty either with buyers needing to get back above the 100-day moving average (red line) and $1,800 to reestablish any momentum.
The Fed's perceived policy shift this month has been the key in accelerating the downside move after being rejected near $1,900 for gold. Now price action rests on the edge of the support level pointed out above.
The US non-farm payrolls release on Friday is likely to provide the next catalyst and a strong report there (both headline and wages) may be enough to trigger the next downside leg in gold with the double-bottom in March one to keep a keen eye out for.
