Gold prices have slumped over 6% since reaching all-time highs on the 3rd of May this year.

Gold prices have slumped over 6% since reaching all-time highs on the 3^rd May this year. This week alone gold is down around 3% and would have called for a great short opportunity.

There are multiple reasons why gold is under pressure, but can the decline continue? The US Dollar is partly to blame as the DXY is up 2.5% over the same time period as mentioned above. Simple economics means that when the US dollar goes up, US-priced commodities such as gold go down in value as investors who use dollars, buy less as it becomes more expensive. Vice versa, when the DXY goes down, gold goes up, because more people using other currencies can buy it as well at a better price.

Given the sharp rise in the US Dollar as the image below denotes, unless this weakens in the coming weeks then gold could easily see more pressure and while technical analysis traders may be looking for support below, if the dollar continues its rise, it will likely continue to struggle. On a technical front, however, the USD on a daily timeframe is reaching near overbought conditions which could suggest the index is topping out. A drop in the USD could see gold stabilise and then jump higher.