Gold Price Forecast – Gold markets get hammered on US dollar strengthGold markets got hammered during the trading session on Friday, as the $1215 level has offered too much in the way of resistance. Ultimately, this is a market that is reacting to the US dollar in general, which of course got a lift after volatility in the British pound.
Gold markets got absolutely hammered during the day on Friday, reaching down to the $1200 level, an area that has been supported in the past. We wiped out a lot of order flow in both directions over the session, and now it looks as if markets are essentially freaking out over the comments of Teresa May suggesting that the Brexit might be a “no deal Brexit.” Ultimately, this market is well supported between the $1200 level and $1195 level underneath. This is an area that should continue to be massive in its implications, so if we were to break down below the band of support here, that would be extraordinarily negative.
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At this point, I suspect that the market is probably going to go back and forth, and as a result range bound trading will probably work out quite nicely. However, longer-term charts look a bit ominous, as we are testing a major support level. If we do break down, it could be the next big “flush” in the precious metals area. If the market breaks down, it’s likely that the selling could be rather ferocious, and you can see that the hourly hammer with the bottom at the $1195 level would be an excellent sign that we are starting to find buyers. If we can break down below that level, I suspect that the momentum will pick up rather drastically. Pay attention to the currency markets, it’s all about the US dollar right now.