Gold sank below 1,250, as stronger than expected U.S. jobs report caused the yellow metal to break below key support level, ending the week at its lowest point. Gold dropped accordingly, and it did so with the greatest of haste on news that the Federal Reserve will now be in a position to raise rates as early as June. Such sentiment lifted the dollar higher, translating into lower prices for the precious metal in the near-term.
The U.S. jobs data release caused the yellow metal to blast below the 200 EMA at 1,255, eventually hitting the session low at 1,228. Technically related selling was also featured, as sell stops were hit and gold prices are now in a downtrend on the daily chart. Given the significance of the 200 EMA, the breakout mark the start of a bear market in earnest, leaving the door open for more weakness next week.
Due to the significant breakdown of the technical pattern, Gold has weathered a correction from the top of 1,307 last month to touch low at 1,228. On the edge of fragility, the yellow metal could fall further as the price complex draws closer to the Fibonacci Extension 100.00% at 1,223 level.