Gold prices dropped to four-year low on Friday, completing the downside move that started last Wednesday after the U.S. Federal Reserve’s decision, and we witnessed today a drop in gold prices following the surprising decision of Bank of Japan (BoJ).
The BoJ extended its stimulus program, raising its monetary base target to an annualized 80 trillion yen from 60 – 70 trillion from a year ago. It also confirmed its commitment to reach the targeted inflation levels of 2%.
The U.S. dollar found a significant support and moved back to the upside to trade close to its highest level in four years, while the USDJPY pair rose to its highest level since 2007.
The dollar pressured gold prices pushing it to its lowest levels since July 2010.
Gold is still at current levels and managed to test them; if we witness other positive economic data, the price will break below its current levels taking a new downtrend.