Gold continues its drop after the breach of $1640, dollar rebounds
Gold continued its drop on Monday trading for the seventh consecutive session after the breach of support of $1640 an ounce and as the dollar rebounded before the release of important data and Fed statement this week.
The yellow metal is currently trading around $1633.85 an ounce yet it halted its drop after finding support at $1630 levels. The day's high was recorded at $1643.20 and the low was seen at $1631.49.
Last week, the shiny metal recorded a weekly drop as it was affected by the tensions in European markets and downbeat U.S. data to continue its downside trend that started after touching a peak of $1790.80 on February 29.
Worries increased after the rise in Spain's 10-year bond yield to above 6% as it is close to 7% level which forced Greece, Portugal and Ireland to ask for an international bailout.
However, during the G20 and IMF meeting over the weekend, the leaders and the fund pledged to double the lending power of the rescue fund dedicated to combating debt crisis.
Today, manufacturing data for the month of April released from China and Germany showed improvement.
On the other hand, the main focus will be on U.S. consumer confidence and new home sales reports tomorrow which will be followed by the Fed's statement on monetary policy in addition to the latest growth, unemployment and inflation forecast later in the week.
The U.S. dollar rebounded today against a basket of major currencies as depicted by the dollar index, before the release of the aforesaid data, after founding support at 79.30, where it fell on Friday after facing resistance at 79.60, which represents SMA level. The dollar is currently hovering around 79.45 compared with the day's opening of 79.30.
Crude oil for June's delivery is meanwhile showing a drop to trade around $103.25 a barrel after opening today's trades at $103.77.