Until November 22, the bullion market has experienced drastic fluctuations. Spot gold has plummeted and fell below US$1830. In fact, after the continuous surge in early November, there has been no obvious correction. Technically, it has been overbought. Together with the news of Fed Chairman Powell’s nomination came out, and gold took advantage of the trend to fall, so the strength of this fall is quite strong.

In addition, non-agricultural data shows that the U.S. economy is in a strong state, inflation presents an upward risk, and data on the job market has exceeded expectations. After an increase of 310,000 in September, the number of non-agricultural employment in October further increased by 530,000, and the unemployment rate dropped from 4.8% to 4.6%, the market generally expects the possibility of the Fed to raise interest rates will increase. Affected by this, the U.S. dollar rose sharply last week, once breaking through the 96 mark. In addition, the Federal Reserve officials made hawkish remarks, which also benefited the trend of the U.S. dollar, resulting in continued pressure on gold. 

Technically, the 1,830 three-top resistance mentioned earlier has successfully broken through, and it failed to stand firm at the end. And on the evening of November 22, it fell sharply and fell below 1,830 and it is a strong decline. As shown in the figure, gold stayed at 1,830, no signal that the downtrend will stop, and it will accelerate down to around 1,800. I think that the uptrend of gold has come to an end. 

If this wave of gold's decline is measured by the "Fibonacci Extension Ratio", the 1:1 decline target is at around $1,760. It seems that there is still room for a decline, but due to the violent decline, gold also needs to rebound. It is expected to rebound to near $1,830. You may observe the candlestick pattern at that time, if there is a double top pattern or some signs of weakness, such as the upper shadow line showing more frequent, believed that it is a good short position. The lower position should first look at 1760 support, and the next level will be 1,682. 

In summary, gold as a whole is still rampant in a wide range, but judging from the downward momentum, expected that there is a high probability to continue to test the core bottom of $1,682.

Hugo Leong Gold Analyst of Hantec Group