Gold Price Forecast – Gold markets rocked by US dollarThe gold market broke down rather significantly during the day on Tuesday, breaking below the $1195 level. However, we popped back above there and showed signs of at least some resiliency.
Gold markets continue to be held hostage to the US dollar which can’t seem to get its direction Set. This has a lot to do with emerging markets and of course the global trade issues, and as a result the gaining US dollar continues to weigh upon the Gold markets overall. If that’s going to be the case, I think that the market will probably continue to offer selling opportunities on rallies, and that’s probably how you should play this market. Longer-term, I am a fan of gold but that’s only in the physical form as you can take the leverage out of the position. If we break down below the $1190 level, that could send this market much lower.
If we were to break down significantly, we could go as low as $1000 but at that point I’d be willing to “back the truck up” to buy as much gold as humanly possible. That’s an area that was a major break out years ago that hasn’t truly been tested yet. In the short term, I think that every five dollars or so you are going to see technical support and resistance, and this remains a short-term and choppy environment. Breaking below the two levels on the chart that make up the double bottom of course shows that there is more negative bias than positive, so keep that in mind. I look for signs of exhaustion as a reason to start selling gold again, and it will follow the EUR/USD pair. It gives you an idea as to how the US dollar is doing overall. It has a positive correlation with this market.