Gold drops from 6-day highs to test weekly lows

• Following a reversal in US yields, gold tumbles to test weekly lows. 
• XAU/USD fails at $1430, finds support at $1415, remains in range. 

Gold is having a volatile day, on the back of the European Central Bank meeting and US data. Initially, the yellow metal jumped to $1433.70/oz, the highest level since last Friday and then retreated sharply, falling to $1415. 

As of writing, trades at $1420, marginally lower for the day. Price remains in a range, facing a strong resistance at the $1430 barrier and with a critical short-term support at $1415. A close above $1430 would clear the way to more gains while on the downside, the outlook favors more losses below $1415. 

XUA/USD spiked higher when Mario Draghi, European Central Bank President, was speaking at the post-meeting press conference. The signals of the announcement of a stimulus package at the next meeting triggered a decline in European bonds and boosted gold. The reversal took place amid a rebound in US yields. The US 10-year rose from 2.02% (lowest since July 8th) to 2.10%, a 10-day high, leaving gold vulnerable. 

Despite all the volatility, XAU/USD continues to move without a clear bias. Traders continue to anticipate what the Federal Reserve may announce next week. On Friday, Q2 GDP data in the US is due. 

Level to watch