Gold price crashes sharply in the early session; Further downside seen

New York (June 26)  CME Gold is down sharply, trading at $1241.21 an ounce, down over a percent before the domestic markets open.

With the lack of any key events or fundamentals driving the crash in prices, market action can be considered the culprit behind the quick downside. While the move has left market participants bewildered, a major unwinding of positions could be the reason behind the decline.

The market is likely to look forward to economic data releases this week which could be supportive for prices if they turn in to be lower than expected; the market is also factoring in a potential delay in rate hikes from the FED which could again be a boost for prices.

Technically, the bias for Gold is negative in intraday.

Price action in the early US session indicates that prices could be headed lower this week. Gold is trading below key support at $1242/oz and is now headed to support levels at $1235-$1230/oz this week; a daily close today would further confirm the downside in prices.

On the upside, resistance is now seen at $1248/oz even though a failure to break lower today would only see prices consolidate in the short term.

Source: CommodityOnLine