Gold drops further below $1220 to lowest in 4 weeks

Despite some relative calm in the currency market, the value of the ounce of gold extended the decline during the American session. XUA/USD printed a fresh low at $1215 and is headed toward the lowest close since early February. 

The yellow metal continues to slide and is looking for some support. Last week, it reached the highest level in three months above $1260. Since then, it lost almost $50. 

Levels to watch

Currently is trading at $1216, slightly above the 38.2% retracement of the rally from $1127 (Nov low) to $1263 (Feb high).  In a few days, gold erased most of February’s gains. 

Despite some oversold readings in short-term technical indicators, the bearish momentum remains high, with the price firm below the 20-day moving average that stands around $1236. The inclination of the mentioned line turned south for the first time since the beginning of the year.  

To the downside support levels might be located at $1210 (38.2 Fibo retracement / 100-day MA) and $1206 (Feb 03 low / Jan 12 high). To the upside, resistance could be seen at $1222 (Mar 3 low) and $1230.