Gold futures are down by almost a percentage point. The decline in the dollar is associated with rising yields in the U.S treasuries and a stronger dollar.
As of this writing, the dollar index is up by almost 0.40% as traders wait for economic data from the US. Tomorrow, the Fed will release its minutes of the last meeting. These minutes will give traders deeper insights about the pace of interest rates.
Also, tomorrow, we will receive the existing home sales. These too, will give an indication of the strength of the economy. Finally, tomorrow, Fed officials, Kashkari and Harker will speak at an event, which will further give an indication of the future of rates.
Gold has had a Fibonacci retracement of 50% from the high of $1360, which it reached a week ago. It is currently trading at $1340, which is an important support level.
Provided the dollar continues to strengthen, there is a likelihood that gold may retrace by 61.8% which will push it to the $1335 level as shown below.
