Gold prices collapsed during the trading session today as investors shifted focus towards volatile movements in the global equity markets. The sell off builds on the plunge witnessed during the overnight trading session and is being seen as a huge negative by analysts on the street. Gold prices came under massive selling pressure in the overnight session as the People’s Bank of China cut interest rates to provide the necessary impetus to the slowing economy. The move led to a huge rally in the dollar which shares an inverse relationship with gold. Many traders would now shift focus towards the Federal Reserve which meets later this month. Many believe that the strong economic reports coming out of the US economy provides the Federal Reserve enough head room to start hiking interest rates. Any such move would be a huge positive for the dollar and could lead to a sell off in gold prices. All eyes would be on the US GDP report which would provide a comprehensive insight into the growth trajectory of the US economy and provide traders with an early inclination about the expectations surrounding the rate hike. It is imperative to state that the Federal Reserve meets later this month and any rate hike decision would be seen as a huge negative for global financial markets according to traders. When looking at the charts for the euro, the currency has been in a strong uptrend over the last week but has found resistance at levels of $1160 which is being seen as a huge negative. The momentum indicators for the stock have given a sell signal which is pointing towards a shift of momentum towards the sell side. The relative strength index has given a sell signal which is a bearish signal. Support for gold prices comes at $1100 levels.

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