Gold Price Forecast February 27, 2018, Technical Analysis

Gold markets initially rally during the trading session on Monday, reaching towards the $1340 level. We ended up seeing this market roll over at that area, falling towards the $1330 level afterwards. That’s an area that begins significant support, extending down towards the $1325 level. I believe that it’s only a matter of time before the buyers return, so pay attention to the US Dollar Index, because it will be a main driver of where we go next in the gold markets. If the US Dollar Index falls, typically that drives the price of gold much higher. As a proxy, you can use the EUR/USD pair as well, because it is roughly half of the Dollar Index.

Ultimately, I believe that we are going to target the $1350 level above, which should be an area of major interest due to the large, round, psychologically significant number, and of course the previous support that we had seen before then. I think that market participants will continue to look at gold as a hedge against significant global risk, but there is the counterargument that the interest rates in the United States are going to go higher. However, when you look at moves historically, quite often the US dollar will start falling before perceived interest rate hikes, as the market tends to be “forward-looking.” It’s a bit counterintuitive, but history has seen this happen more than once. Beyond that, it looks likely that Europe will step away from quantitative easing, and by the very weighting of the US Dollar cabinets, that should bring the value of the greenback lower.

Gold Price Video 27.02.18