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Gold Price Forecast – Gold Markets Form Bearish Engulfing Candlestick

By:
Christopher Lewis
Published: Aug 7, 2020, 16:29 UTC

Gold markets had a rough ride during the trading session on Non-Farm Payroll Friday, as the $2100 level proved to be a bit too much.

Gold

Gold markets have formed a massively bearish candlestick during the trading session on Friday as we initially tried to reach towards the $2100 level before pulling back and falling down. Ultimately, this bearish engulfing candlestick is a negative sign and it is likely that we will probably see a bit more selling pressure. Ultimately, this is a market that could go down towards the $2000 level, an area that should be psychologically and structurally important. Furthermore, we could even drop down below that level towards the $1925 level where I see a gap that could be paid attention to as well. Either way, the US dollar strengthening during the trading session of course had a negative effect on gold.

Gold Price Predictions Video 10.08.20

Sooner or later, these type of parabolic moves get corrected, even if it is going to be the major trend. I think looking for value is the best way to go when trading gold and chasing the trade could be a great way to lose a lot of money. With that being the case, I am looking for a dip to at least 2000 to get involved and recognize that if I want to short the US dollar, I can do it with other currencies, and not necessarily take the risk of a parabolic market like gold.

I do think that eventually we go to the $2500 level, but it is going to take some time to get there. The fact that we have covered almost $300 worth of real estate in the last couple of weeks tells me that we are far too overbought.

For a look at all of today’s economic events, check out our economic calendar.

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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