Gold extends slide after break of 100-day moving average

Gold trades near session lows at $1,310.82

After forming a double top pattern (1) at the highs of this year near $1,366 levels, gold has steadily declined since mid-April and price has broken below the 100-day MA (red line) for the first time since it got above it back in December last year. The break came last week but the fall was still supported by the 38.2 retracement level @ $1,316.64.

But the support level didn’t hold for long as it gave way in yesterday’s trading, and the decline now extends into today. The next support level for gold is the 27 March low @ $1,307.23 (dotted line) but the key support level to look out for will be the region between the 200-day MA (blue line) @ $1,304.55, the 50.0 retracement level @ $1,301.35, and the $1,300 psychological level.

A break below the 200-day MA will turn price action more supportive of a bearish narrative, but the real break for a further downside move will have to be against those levels mentioned.

At the moment, the dollar picture continues to dominate with geopolitical tensions so far playing little role in dictating the movement of gold in the last month.