Gold Price Forecast – Gold forming possible double bottomGold markets fell initially during the day on Monday, bounced again, then fell again, only to bounce later in the day. In other words, we have a lot of volatility in the market. As you can see on the chart, I have two areas marked that could be forming a bit of a double bottom.
Gold markets of course are very sensitive to the fate of the US dollar, which is getting sold off during trading on Monday as it has been stated by the EU official we may be within two months of the Brexit negotiated deal. If that’s the case, it would be very good for the Euro, and even better for the British pound. In other words, it should lead to more US dollar selling. However, we have the concern over emerging markets, which has kept the dollar elevated. All of this noise is contributing to a very choppy and difficult gold market.
Longer-term, I believe that the US dollar will continue its downward trajectory, but right now we obviously are doing that. So with that in mind, I like buying physical gold occasionally, as well as silver. But as far as leveraged products are concerned that’s an entirely different scenario. I think that the $1205 level and the $1210 level both could offer significant resistance. It now appears that the $1197 area is offering significant support. I think short-term scalping back and forth will probably be what this market continues to offer. I anticipate that we will go looking towards the $1205 level in the short term, but whether we can hang onto that movie is a completely different question. If we were to break down below the $1195 level, that could lead to even bigger selling as it would break the bottom of what could be the double bottom.