In the early morning trade, April gold has continued its sell off and is currently trading at $1,228.7. There are a couple of reasons gold has sold off more than $30 from last week’s high. The main reason is that the latest news of US rate hikes and the US dollar traded at its highest price since January 11. April gold traded lower overnight and made fresh new weekly lows, which should leave the bear camp in control. However, with gold at these prices, any break in the US dollar might give the bulls another chance to buy at these price levels.
If you take a look at the daily April gold chart, you’ll clearly see that gold has broken below all its bullish trend lines, which leaves it vulnerable for a sell of down to the $1,200.0 an ounce level. However, if gold could hold above $1,225.0, then the gold bulls should enjoy a rally back up to at least yesterday’s high of $1,250.8. If gold could break above that high, then look for another up to $1,270.0, which is currently where the 200-day moving average rest.