Gold breaks to the downside and drops to 5-week lows

• Gold tumbles as US Dollar and Wall Street rise sharply. 
• XAU/USD eyes key $1,310 level that could open doors to $1,300. 

Gold dropped more than $5 during the last hours amid a rally of the US dollar across the board, not driven by higher US yields. The greenback gained momentum following reports about Trump’s advisor Kudlow and Treasury Secretary Mnuchin going to China. The news eased fears about the “trade war”.  

Equity prices also reacted to the upside. The DOW JONES was rising 0.98% and the NASDAQ 1.51%. US yields were lower. The 10-year yield retreated back below 3% from the highest since 2014. 

The yellow metal was trading in a range between $1,325/oz and $1,321/oz until it broke to the downside. It quickly fell to $1,316.60 hitting the lowest level since March 21. 

Gold was holding near the lows about to test $1,315 and closer to the $1,310 area. A daily close below that level would be the lowest since December and could open the doors for a test of $1,300. 

Technical levels 

If the decline continues, the next support level might be seen at $,1314 followed by $1,307 and $1,300. On the upside, resistances could be located at $1,322, $1,326 and $1,333 (Apr 24 high).