Gold held its own overnight in the face of a stronger dollar overnight following sparking economic data from the U.S. to close unchanged at 1309.00. Gold, however, has plunged in Asian trading, dropping to 1297.00 in the last hour before bouncing to 1302.50.
The price action and the timeframe suggest it has all the hallmarks of a large sell order going through in a low liquidity time. In all likelihood, more stop losses were probably triggered through 1300.00 as well adding to the selling pressure. The fact that it has already regained 50% of the drop just as quickly implies that it was a large one off flow.
Support at 1296.00 remains intact with trend line support behind this at 1284.00. Resistance is at 1309.00 and then 1314.00.
One off flows aside; gold will be somewhat at the mercy of random month-end U.S. dollar flows today with the technical picture still constructive as long as the 1284.00 support holds.