Gold sees one of its worst daily decline since 2018 ahead of US PCE on Thursday

• Core Personal Consumption Expenditure (PCE) is scheduled on Thursday at 12:30 GMT.
• Next support for Gold is seen at $1,315 and $1,305. 

Gold is trading at around 1,324.76 as it plummeted 1.48% on Wednesday. The greenback came back to life and gold bears managed to print one of the worst daily decline since the start of 2018.

For the time being, gold is inversely correlated to the US Dollar and Thursday will see a tier-one macroeconomic data from the US with the Core Personal Consumption Expenditure (PCE) Price index over the year to February; analysts expect the data to accelerate to 1.6% from 1.5% in January. The Federal Reserve will be closely watching the data as it is its favorite gauge to measure inflation. A better than expected reading would generally be seen as US Dollar-positive.

Back on Tuesday gold found resistance a few ticks shy of $1,357 and it reversed down as the threat of an all-out trade war between the US and China started to abate. On Wednesday the bear pressure remained constant and the better than expected US Gross Domestic Product (GDP) boosted the greenback, therefore, putting additional pressure on the yellow metal. Quarter-end along with month-end flows profit-taking coupled with rising US Treasury yields also helped underpin the US Dollar

Gold daily chart

Gold is finding some support at the 100-period simple moving average. 

Gold 4-hour chart

As expected gold is finding support close to the $1,326 level with the 61.8% Fibonacci retracement level from the March, 20-27 bull leg. It is now trading below both the 100 and 200-period simple moving average and the momentum down seem intact although it would be reasonable to expect some consolidation at the $1,326 level. The next scaling point lower is seen at $1,315 previous demand zone and then the $1,305 multi-month support. Resistance could be expected in the $1,326-$1,332 zone, between the 50% and 61.8% Fibonacci retracement discussed above. If this resistance zone fails then the next support level is seen at the $1,340 figure close to the 38.2% Fibonacci retracement level.