Gold dropped significantly and resumed the bearish movement. Price is into a corrective movement after the impressive rally. The bears have taken the lead on the short term as the US dollar has managed to increase versus its rivals.

Remains to see how long the correction will be because the yellow metal maintains a bullish perspective on the medium term. The rate has dropped through a confluence area and now is pressuring a dynamic support, a further drop is expected if the USDX will climb much higher.

The current drop could be only temporary and the rate could start to increase again. Right now is under massive selling pressure, but is premature to talk about a larger drop as long as the USD is still weak. The greenback received support from the United States economy today, the Unemployment Claims have dropped unexpectedly in the previous week, from 230K to 221K jobs, even if the traders have expected to see an increase to 232K.

Remains to see what will happen in the upcoming hours because the USD wasn’t inspired by the good Unemployment Claims data, the greenback dropped in the last two hours.

The yellow metal could drop further as the AUD/USD seems unstoppable on the short term, the pair drops further as the Aussie was weakened by the poor Chinese data. The Trade Balance decreased from 362b to 136B, has come in much below the 328B estimate, while the USD-Denominated Trade Balance decreased from 54.7B to 20.3B.

Gold dropped after the false breakout above the confluence area formed between the 1357 with the sliding line (ascending dotted line). Price squeezed in the last hours and could come to retest the upper median line (uml) of the red descending pitchfork. Only a valid breakdown below the second sliding line (sl2) will confirm a further drop towards the 38.25 Fibonacci level.