In the afternoon we can observe a clear sell-off in the precious metals market, which accelerated after the publication of PPI inflation from the US. Gold loses equally with other precious metals such as silver, platinum and palladium.
The gold market has reacted negatively to the news about tapering in the past, so a potential acceleration of this process may put further pressure on gold. Nevertheless, it is possible that many investors may decide to close short positions as this risk materializes at tomorrow's Fed meeting, in particular as gold is approaching an important support in the form of the lower limit of short-term consolidation zone.
From a technical point of view, gold price managed to break below theDecember 10 lows, which poses a risk that downward move may accelerate towards the lows from the beginning of the month - around $ 1762 level. At the moment, it seems that only a return above the $ 1770.5 level could lead to an upward correction.
Gold under selling pressure, trading below $ 1770, H1 interval. Source: xStation5
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