Gold price plummets, approaches $1,100/oz

New York (Nov 4)  The yellow metal is falling sharply on Wednesday amid a stronger US dollar on rising expectations about a rate hike by the Federal Reserve in December. The ounce broke below yesterday’s lows at $1,114.30 and dropped further.

Recently bottomed at $1106.60 hitting the lowest level since October 2. Spot gold remains trading near the lows, still holding a strong bearish momentum.

Technical indicators show oversold readings in every time frame but the decline does not stop. Today is falling for the six day in a row, accumulating a decline of more 6.40% from last week highs.

Eyes on $1100

Greenback is rising across the board, as the US ADP employment report and Yellen’s words continue to leave the door open for a rate hike at the next Fed’s meeting. Gold continues to decline and it could remain weak at least until the NFP report.

The next key support is the $1,100 area. During September it traded momentarily below but quickly bounced back above; on October, it approached but rebounded to the upside. Now the mentioned level is exposed and it could be tested. If it remains above, possibilities of a bullish correction would rise.

Source: FXstreet