Non-farm payroll data gave traders the confidence to push the USD Index back near the multi-year highs after teasing us with potential for a long, drawn-out complex correction. However when you see such an energetic move on the USD Index it usually means we are set to see established trends across the majority of any market related to it.
Gold is no exception and appears to have completed an ABC correction and now within a particularly aggressive impulsive wave lower. The break below $1100 was done with gust and the $1100-04 zone would make a likely area to consider sell-limit orders (if it can drag itself up that far).
Initial targets are the $11076.37 but, due to it being a multi-year low, we can expect some profit taking and subsequent price reaction (this is a very similar situation to AUD and EUR). However a break beneath here could see it test the lower blue support level around $1160. Due to the aggressive nature of the wave we could even see it break this support level so I am not placing too much confidence in it right now.
GOLD continues to unfold: Multi-year lows in site
The break below $1100 was done with gusto and, assuming we even see a minor pullback, traders are likely to see any bounce higher as an opportunity to load up their shorts.