Gold Slides Below 1600 After Bernanke Holds off Stimulus

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XAU/USD 4H Chart , 11:30AM EDT 6/7/2012

Quantitative Easing would have been USD-negative and gold-positive. Bernanke gave us no clues on QE, and holding off that decision until the next FOMC meeting, Wednesday June 20. Gold was not able to continue its recent rally, and fell below 1600.

The 1H chart shows that there is a pivot near 1572.60, where we also have a projected trendline. The 61.8% retracement of the 1530.67 - 1640.43 rally, is also at this level. Below that, the market is probably looking to retest the support near 1530.

To the upside, the 1600 should again be a key resistance to monitor, above which, we might extend the rally since the end of May. This rally has the 1666.50 central pivot of the range seen in the daily chart in sight.

If the market can bounce off this level, the market might still have a reason to believe that QE is a possible tool to be brought up in the next FOMC meeting.

XAU/USD 4H Chart , 11:41AM EDT 6/7/2012

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Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.

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