Gold plunged sharply on Wednesday, decreasing the price of yellow metal to less than $1225 an ounce, following the release of some key economic news. The technical bias remains bearish because of a lower low in the recent downside move.

Technical Analysis

As of this writing, the yellow metal is being traded around $1222 an ounce. A support can be noted near $1200, the psychological number ahead of $1156, the horizontal support area and then $1133, the lower trendline support zone.

On the downside, a hurdle can be noted near $1250.00, the psychological number ahead of  $1275, the trendline resistance zone and then  $1300, the psychological number as demonstrated in the given below daily chart. The technical bias shall remain bearish as long as the $1337 resistance area is intact.

US Import Price Index

The U.S. import price index rose more-than-expected last month, official data showed on Friday. In a report, US Department of Labor said that U.S. import price index rose to a seasonally adjusted 0.4%, from 0.5% in the preceding month whose figure was revised up from 0.4%. Analysts had expected U.S. import price index to rise 0.2% last month.

Trade Idea

Considering the overall technical and fundamental outlook, selling the precious metal around current levels appears to be a good strategy in short to medium term.