Gold Sells Off as Dollar Surges

As we head into years end markets become more and more uncertain due to increased volatility and unexpected price changes. The interest rate yesterday acted as a catalyst to a new wave of dollar rally and that resulted in a sell off in the Gold market. 

The precious metal went from $1,165 to $1,138 on the day of the raise and continued to depreciate the next day going as low as $1,122. Currently, Gold is slightly recovered and is trading around $1,133. This, however, might only be a reflex from the sharp sell off and price still has a good chance to continue South to a probable first target level at $1,100. 

It wouldn't be surprising if bears try to reach that psychological $1,100 before the year ends as this looks a realistic goal for we have seen what Gold did in the second half of the year. 

In January this year Gold was at a low at $1,046, then went up almost 40% to a high of $1,375. Now Gold has lost almost every gain made throughout the year leaving all Gold bugs devastated. 

The economic outlook for the US economy is very optimistic and that might reflect on the price of Gold in the near future and Gold bulls might not like it.

Chart: XAU/USD H4