Gold Price Forecast – Gold markets start out the week softGold markets fell at the open on Monday, reaching down towards the $1205 level, before bouncing a bit. Market participants continue to be very aggressive to the downside, but we are approaching a major support level.
Gold markets continue to be very negative overall, as we have dropped towards the $1205 level. There is even more support underneath at the $1200 level, and this is an area where it makes sense that we could bounce from. I think longer-term “buy-and-hold” traders will be looking at this level as a potential entry point. I believe that the market continues to be very noisy, but keep in mind that the US dollar has an inverse relationship to gold. It has been strengthening over the last several days, and with the British pound fall in the way it has this has only offered more in the way of pressure on gold as the greenback reigns.
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That being said, I think that if you look for support of candles closer to the $1200 level, you might get a nice buying opportunity. If you take the leverage out of the situation, you may be able to take advantage of a longer-term move, but I would be very quick to exit a losing trade, and I wouldn’t put too much money to work in one shot. I believe that this market continues to be very dangerous, but this could be where we turn things around. Otherwise, if we break down below here it’s likely that we go looking towards the $1140 level, and then eventually the $1000 level underneath which is even more supportive and would be even more interesting for longer-term buyers. I think that it’s difficult the short this market until we get below $1200 at this point though.