Gold fell on yesterday session to near a recent four-year low as the dollar index rose to its highest since mid-2010 on speculation that the U.S. Federal Reserve will act before other major central banks to tighten monetary policy.
Later this week we will have the key US jobs data and the European Central Bank decision on Thursday the Dollar Index rose to new 2-year highs.
GOLD fell yesterday to daily support at 1,163.47 where buyers finally came in and we saw a retracement from the low of the day but close in the red creating an inside day. The stochastic is in an oversold condition. Will GOLD have enough strength to hold the daily support zone?
Expecting a downward move to 1,143.41 on a break below previous day low at 1,161.62 (scenario 1) or a break above previous day high at 1,173.76 could push GOLD to a daily resistance at 1,204.70 (scenario 2).