Gold drops sharply toward $1270

Gold accelerated to the downside after the ECB meeting, Draghi’s press conference and with the initial testimony of former FBI Director Comey. The value of the ounce bottomed at $1271,  the lowest level since last Friday. 

James Comey Live Speech at US Senate - Senate Intelligence Committee

The metal is falling for the second day in a row. Currently, it trades at $1276, $20 below Tuesday’s highs. 

Gold price continues to move strongly correlated with US bond yields. The US 10-yr rose above 2.20% as it continues to bounce after hitting multi-month lows on Tuesday. 

Capped by $1295, correction gains momentum 

On Tuesday XAU/USD rose to test April highs near $1300. It was unable to break the $1295 level and then lost bullish strength. It started to pullback and today the correction gained intensity after losing the $1280 support. 

Price is still above key daily MA and also on top of a short-term uptrend line that stands around $1266. A decline below would add more downside pressure and would probably remove the upside bias. In order to regain strength, gold needs to rise back above $1284.