Gold is down by over 1% to a low near $1,693
After testing resistance near $1,740, gold is taking a trip back lower to start the week as oil prices come under pressure once again. It was also a similar case for gold in the early stages last week as we saw price fall to a low of $1,659.55 at the time.
One can pin the move to margin call risks and/or deflation pressures but technically, the inability of buyers to keep above the key hourly moving averages also isn't a good sign.
Buyers defended the 200-hour MA (blue line) briefly in overnight trading but it has been one-way traffic in trading today as gold falls from around $1,710 to near $1,693 now.
The next support level to watch out for will be the 61.8 retracement level of the recent swing move higher and that sits at $1,690.01.
There is also some minor support closer to $1,680 but thereafter sellers will be looking to retest last week's low at $1,659.55 should the downside momentum keep up.
In the long-term, I still see any significant dip in gold as being a good investment opportunity. But as we are still caught in the eye of the coronavirus storm, one has to be careful of the volatility involved during this time.
