Gold shows very high intraday volatility with a very high downward sales pressure towards 1080. It created a weak red hammer candlestick as Gold pushed through the support line.
Below this level buyers came in and pushed the commodity back up and it is now back trading more or less at par with silver intraday down 1,93 % at 1112.
The RSI and the MACD show that it is oversold.
It seems as if it could make a small bounce back now but then it will probably drop further as the stop-losses are pushed out. It could also take a significant drop tomorrow if this was just a temporary stall.
According to Zerohedge, it was a flash crash as somebody sold 2.7 billion worth of Gold contracts.
According to Bloomberg the reason for the 4.6 % intraday drop was due to a lower than expected increase in Chinese Gold holdings.
According to the Financial Times it was asian traders who orchestraded a selloff.
Overall it seems as if there is very strong sales pressure on Gold both for fundamental and technical reasons.
I will open a short position in Gold here of 10 contracts worth 11123 dollars in my fictional account with Tradingview, expecting it to drop further as I expect it to break through the current resistance level.
I will put a target of 1000 $ as there is resistance here and a Stop-loss of 1239 as I expect some volatility in the price but in general expect that the price will drop further.