Gold dropped as much as 1,725.51 earlier as the Dollar Index has registered an amazing rally. The yellow metal maintains a bearish bearish bias, so a further drop is imminent. You already know from my analyses that XAU/USD could approach and reach fresh new lows after dropping and stabilizing below major downside obstacles.
Fundamentally, the price of gold dropped significantly after the FOMC. The FED is expected to hike rates next year, so the risk-on sentiment dominates the market. Fed Chair Powell's speech today at the ECB Forum could bring high volatility on XAU/USD.
XAU/USD More Declines In View!
The price of Gold is pressuring the weekly S1 (1,729.71) level. A valid breakdown through this obstacle could open the door for further drops. I've told you in my previous analyses that Gold's failure to come back to test and retest the downtrend line signaled a further drop.
Also, its valid breakdown below the median line (ml) announced a downside continuation. The weekly S2 (1,709.07) and the lower median line of the ascending pitchfork are seen as potential targets if the XAU/USD extends its decline.
Closing and stabilizing below the S1 (1,729.71) is seen as a selling opportunity. The pressure is high after failing to come back to test and retest the 1,750 former support. The S2 (1,709.07) is seen as the first downside target.