Gold technical analysis 35

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Gold has once again showed its strong association with the US dollar and has now fallen heavily 4 out of the past 5 trading sessions and further losses seem unavoidable.

In what has become a familiar trading pattern, gold has travelled the opposite way to the greenback as the latter makes a strong recovery as fears grow that the dramatic fall in the US stock market earlier in the week is not done and many expect it to tumble further.

The sudden drop in gold has seen it retreat to a critical support level which was established just after the New Year and a clean break of this today will probably see the precious metal break down through the physiological $1,300 mark before finding its next round of support at $1,295.

The RSI index is currently at 40 and shows that there is still room for gold to fall down to the figure of 30 which will push it into oversold territory.

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