The yellow metal plunged 26 points yesterday to close at $1483.30 on the back of a positive US Non-Manufacturing Service figure that came in at 54.7, beating expectations by 1.3 and last month's figure by 2.1; strengthening the dollar as risk on sentiment continues to spread across markets. A slightly larger than expected trade deficit of $52.5b vs. a forecast of $52.4b had little effect on investor sentiment, as the market has priced in and is anticipating positive news surrounding the phase one deal between the US and China, keeping the safe haven bullion under pressure.
Gold is trading below the 20 SMA and 50 SMA on the daily chart, and also below the 200SMA on the 4H and 1H chart which paves the way to further downside as short term bearish momentum builds up. Momentum indicators are currently in the oversold zone indicating the possibility of a correction towards R1 if we see a close above $1487 on the hourly chart, while a break below our S1 level at $1482.93 is likely to pull prices lower in an attempt to test R2.
Support: 1482.93/ 1474.34/ 1461.09
Resistance: 1496.89/ 1507.27