Gold defends September lows, for now.


Monday was a disaster for the bullion, and it plunged 5%, one of the largest declines ever for the metal.

From its daily highs, it dropped circa 110 USD before consolidating. It looks like investors bought the dip at the strong support of September lows and gold was rising nearly 1% on Tuesday, trading at around 1,880 USD.

It looks like the critical support for gold now lies at 1,850 USD, where September lows are located and the price stopped its decline here yesterday. Below this level, many large stop-losses might be placed. Thus, breaking below this level could be a bearish confirmation and the short-term trend would most likely switch to bearish. 

The next targets for bears could then be at 1,815 USD and afterward at around 1,790 USD/

Alternatively, the resistance could be found near 1,895 USD, where the bearish trend line is located. If gold jumps above this level, we could see a nice rally, targeting 1,925 USD.

Volatility might be a bit lower today after yesterday's huge decline, but gold needs to stay above 1,850 USD if bulls want to attack all-time highs anytime soon.
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