European Central Bank President Draghi's neutral tone yesterday forced the precious metal, which in the last few weeks capitalized on expectations of major central banks turning dovish amid the dismal global economic outlook, to weaken against major currencies erasing more than $10 on the day. Despite the recent disappointing data from the European area, ECB President Draghi said that the Governing Council has not discussed a rate cut at the monetary policy meeting and added that they will assess the next batch of hard data before making a policy change. On the other hand, the Durable Goods Orders data published by the US Census Bureau, which is seen as a reliable gauge of economic health, rebounded decisively in June by expanding 2% on a monthly basis following May's contraction of 2.3% and surpassed the market expectation of 0.7%. Today markets will be paying close attention to the first estimate of the second-quarter GDP growth data published by the US Bureau of Economic Analysis.
Gold prices dropped during yesterday’s session by more than 10$ and settled just above the $1410.78 support level after failing over and over to break above the $1426 level. The price is currently trading just above the lower band represented on the chart as the momentum continues to drop. We will be focusing on the downside and we will be watching closely the $1410.78 support level and any break below the lower purple trend line. Our next level to watch is the $1401.62 support level.
Support: 1410.78 / 1401.62
Resistance: 1435.81 / 1441.79