Gold reached another downside target December 07, 2017

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Gold plunges on the short term and seems unstoppable. Price reached new lows today as the USDX has managed to resume the bullish momentum. The dollar index climbed higher on the short term and is pressuring the 93.81 static resistance. I’ve said in the last weeks that the USDX will jump much higher ahead of the FOMC Meeting if will have enough energy to breakout above the 93.50 psychological level.

USDX may climb much higher as the traders are still confident that the Federal Reserve will hike the rate on December 13. Gold will drop further if the dollar index will make new highs, only disappointment on December 13 will boost the yellow metal.

Gold drops as the Aussie and Kiwi are losing significant ground versus the greenback. The Australian dollar was punished by the poor Trae Balance, the trade surplus decreased more than expected, from 1.60B to 0.11B, has come much below the 1.37B estimate, that’s why the AUD/USD is losing altitude very quickly. The Australian AIG Construction Index was reported at 57.5 points, much above the 53.2 in the former reading period, but wasn’t enough to save the Aussie from the downside.

Gold reached the median line (ml) of the minor red descending pitchfork after the breakdown through the 61.8% retracement level. A further USDX increase will force the yellow metal to breakdown below the median line as well. The current drop is natural after the retest of the 50% Fibonacci line (descending dotted line).  Remains to see how will close the day, a breakdown will signal a further drop. Price could rebound if will have a false breakdown or if will close much above the median line (ml). Technically, it will take out this if will close on it, another important downside target will be at the second warning line (WL2) of the ascending pitchfork. A valid breakdown below the median line (ml) could announce a drop towards the lower median line of the minor red descending pitchfork.

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