Gold Bounces Off Key Technical Level, Erases Earlier Plunge

Update: European markets closed and gold found a bid, erasing earlier losses...

Bouncing perfectly off its 200DMA...

And for now, it has decoupled from the dollar strength...

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Gold futures suddenly took a turn for the worse this morning as 'someone' once again decided that 0830ET was the perfect time to puke over $1.5 billion notional of the precious metal into the market...

Over 11,500 gold futures contracts suddenly dumped into the market...

...pushing it towards its 200DMA...

Silver is also getting hit...

Helped by a sudden surge in the dollar...

WTF?

And once again, it's happening as the London Fix looms...

Not Manipulated though.

We give the final word of this farce to Bloomberg's Jake Lloyd-Smith:

Gold is due for a delayed lift from the U.S. upping the ante against Iran with the decision to end the sanctions waivers. That move, if enforced, puts a U.S. boot on Tehran’s windpipe and sets the scene for further tensions. Iran is already talking about choking off the Strait of Hormuz, the vital maritime conduit for Persian Gulf shippers. While RBC Capital Markets reckons that the U.S. Fifth Fleet could handle a direct challenge in that area, any flare up would boost both crude and bullion.

Don’t forget gold’s other drivers, with central banks stocking up and the Fed hikes on hold, restraining the dollar. Bullion hasn't had a stellar year, as the $1,350 level proved tough to crack, equities revived and flows into ETFs reversed with the ebbing of recession concerns. But back down around $1,270, it may be worth another long look.