Gold extends slide, hits fresh lows under $1320

• Gold decline resumes after ECB meeting. 
• US Dollar rebounds on easing fears of a global trade war. 

Gold dropped further and reached at $1318.80/oz the lowest level since last Friday. The metal was holding near the lows, trading around $1320,  $20 below yesterday’s high. 

The decline was triggered by a rally of the US Dollar across the board. The greenback was modestly higher and accelerated to the upside after Mario Draghi’s press conference. When the ECB released its statement, USD bottomed but then rebounded sharply and turned positive. The rally took place particularly against European currencies. 

The ECB kept rates unchanged and dropped an explicit pledge to increase the size of QE from the statement. The move was expected by most analysts. Draghi then included FX among downside risks for the outlook. 

Easing fears of a global trade war supported the US dollar and Wall Street.  DXY Futures rose to 90.00 for the first time since last Friday. 

Levels to watch 

The short-term outlook continues to point to the downside. XAU/USD is approaching a relevant support area between $1320-$1317. Below the next support is seen at $1313 followed by $1310. On the upside, resistance might lie at $1323, $1329 (Mar 8 high) and $1335.