FXstreet.com (Barcelona) - Gold prices have touched level below $900 an ounce on March 4 for the first time in 4 weeks as XAU/USD has dropped already 9% of its value since having reached $1006.45 on Feb 20.

According to Michael Malpede, technical analyst at Easy Forex, Gold could have depreciated by various reasons, namely the recent USD strength or US savings rate; U.S. savings trate reached a 14-year high in January.

Nevertheless Malpede finds it difficult to explain the sharp drop on Gold prices in a time of economic turbulence such as the present one: The decline in the price of gold is little bit harder to explain. Gold rallied to $1000 an ounce mid February and has declined over $90 in the last two weeks. Gold is viewed by many investors as the ultimate safe haven shelter. With US equity markets trading near a 12 year low, the latest price action in gold is disappointing and surprising.

Although the economic environment does not seem the best to assume risks, with U.S. unemployment skyrocketing and countries like Australia entering into recession for the first time in years, the recent revival of risk appetite could well be inspired by the huge stimulus measures adopted by major industrial countries, which might be generating hope at the bottom of the economic slowdown.

Technically speaking, Malpede Affirms that Gold's long term bias remains on the upside as long as $870 support holds: A short-term test of channel support near $870 appears likely in the coming sessions. If this level holds the technical pattern for gold may indicate that the current decline price of gold is a correction from extreme overbought levels and the uptrend will soon resume.

A move lower from there will confirm that Gold is on its way down, says Malpede: If the channel trendline support level is broken it could signal the start of a major technical reversal for the price of gold.