May 16, 2018 11:00 AM
Gold future dropped nearly 2% on Tuesday morning as the USD increased 0.75%.
Gold broke below $1300 to $1291 per ounce before a small bounce.
The dollar rose as interest rates increased, with the yield on the 10 year note reaching as high as 3.065% before falling off. Rates increased after the release of the latest retail sales data, which came in at 0.3% month over month growth for April, below analyst estimates of 0.4%, which is still considered strong. Retail sales for March were revised to 0.8% from 0.6%.
The chart below shows gold falling as the declining phase of its current market cycle comes to a close. From technical point of view double top pattern has been formed on the daily chart which indicates that $1260 will be the new base camp for bears.
The sentimental studies indicate that bears are controlling and playing at front foot and there is no chance for bulls as long as $1315 level remains intact.
Other indicators are completely supporting the bears and a short term bounced can’t be ruled out but that should be taken as selling opportunity.