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Gold forecast for the week of October 27, 2014, Technical Analysis

By:
Christopher Lewis
Updated: Aug 25, 2015, 03:00 UTC

The gold markets tried to rally during the course of the week, but as you can see the $1250 level offered enough resistance to turn the market back

Gold forecast for the week of October 27, 2014, Technical Analysis

The gold markets tried to rally during the course of the week, but as you can see the $1250 level offered enough resistance to turn the market back around, and formed a shooting star. The shooting star is a very negative sign, and as a result it appears of this market is ready to continue grinding lower. We have to get to a fresh, new low before we feel that the market can really start to fall with any significant momentum, but at this point time you have to favor selling gold as opposed to owning it. After all, the US dollar continues to strengthen overall, and that of course works against the value of precious metals in general.

The shape of the candle is perfect, and it is at the exact place you would want to see it if you are bearish. Because of that, it’s only a matter of time in our opinion before this market rates down and starts to really selloff. Once the $1200 level is firmly in our rearview mirror, it’s very likely that we will then head down to the $1000 level, which of course is the next large, round, psychologically significant number. With that being the case, it’s probably going to be very likely that we would fall away down there in order to try to find buyers.

The $1000 level as you can see on longer-term charts is one that is a very significant area historically, and as a result it would make a lot of sense if we had a lot of buying pressure in that general vicinity, but at this point in time, there’s no signs that the buyers are going to step into the market and push prices higher. This will be especially true as long as a US Dollar Index continues to rise, which of course was very bullish of the moment. With that, we believe that there is a longer-term buying opportunity in the gold markets coming, but we are nowhere near it at the moment.

 

goldWEEK

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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