Gold forecast for the week of November 30, 2015, Technical Analysis

The gold markets fell during the course of the week, dropping to fresh, new lows. This of course is a negative sign and as a result has us selling yet again. On top of that, we broke down below the bottom of the hammer from the previous week, and that of course is negative also. The strengthening US dollar will continue to work against gold in general, so with this being the case we believe that the market will probably continue down to the $1000 level, where we would expect a lot of psychology to enter the market. Given enough time, this is a market that should continue to see quite a bit of bearish pressure, and could even break down below the aforementioned $1000 handle. In the meantime though, it looks as if you could sell rallies going forward, but a lot of the “easy money” has probably already been made.

We believe that there is a massive ceiling in this market, somewhere near the $1200 level. Once we get back above there, you could consider a trend change at that point to the upside, but there is quite a bit of resistance at lower levels as well. In other words, this is a market that we have no interest in buying, especially from a longer-term perspective. There does come a time someday when we will start buying though, as we believe that we are currently doing enough destruction in the value of gold that eventually there will be a longer-term “buy-and-hold” signal presenting itself as gold would simply become too cheap.

It might be a little bit easier to trade off the shorter-term charts, but nonetheless we feel that the only direction you can deal with is the downside. The downside of course means that we get a strengthening US dollar, so pay attention to the US Dollar Index, as it is currently bouncing around the psychologically significant 100 level. If we can get above there, that will put significant pressure on gold going forward. Patience will be needed, but there is profit to be had to the downside.