The gold price has continued to tumble today after yesterday’s dramatic slide on the back of strong data out of America that increased the chances of a rate hike from the US Federal Reserve.
At 7.18pm (GMT) the gold price was trading at $1,265 down from $1,267 in yesterday’s trading.
After falling $43 yesterday, its biggest one day decline since 2013, gold remained under further pressure as The ISM's purchasing managers index (PMI) which is a major driver of the services sector and a key driver of the American economy, jumped to 57.1 in September and well up on the previous months figure of 51.4 marking the highest figure in 11 months.
The news had investors exiting safe haven assets such as gold and piling into the US dollar as expectations grew that a rate hike from the US Fed is just around the corner.
“Rallies will now be seen as a chance to sell, and today’s early rebound could be just that opportunity. Classically, you would be looking at a pullback to the neckline at $1,302 as the selling opportunity, but the bears may not wait that long,” noted Richard Perry, analyst at Hantec Markets.
"Gold could struggle to recover all of its Tuesday losses": he added.
The precious metal is likely to stay under pressure until Friday with the release of the NON Farm Payrolls figure from the US with a strong number all but guaranteeing a rate hike from the Fed in December.Publication source