Gold dropped to test the weekly support zone around 1681-1685 on July 21 because the US Dollar Index up trend has been strong since the announcement of aggressive US Interest Rate Policy
Gold was trading around 1682-1683. But, a surprise 0.5 rate hike by ECB causing gold to jump from 1683 to 1709 in 1 hour.
The sold off from 1812 to 1682-1685 is the result of aggressive (hawkish) US Interest Rate policy by the Fed and a dovish policy by ECB and other central banks around the world. However, ECB has started to be hawkish and the market is making an adjustment to the US Dollar.
US interest rate news is driving gold price to go up or go down. Gold has started its correction on July 21 to 1736-1739. Gold is expected to continue to make a correction from July 21 to July 27 to wait for FOMC Meeting Minutes and Fed interest rate decision.
Gold went to 1736-1739 on July 22, but it fails to hold above the 1729-1733 zone to continue its short term up trend. Gold may drop to test the 1708-1709 or 1698-1700 zones next week while waiting for Wednesday July 27 FOMC Meeting Minutes and Fed interest rate decision.
Gold trend is down and it has the following resistant zones: 1736-1739, 1746-1751, 1773-1775, 1786-1791.
Gold is making a correction and is has built a strong support zone 1683-1685. The following support zones are key zones for next week 1719-1721, 1708-1709, 1696-1699. Gold is making a correction so these zones should be watched for a bounce if gold drops to test them next week.