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Gold Prices August 25, 2015, Technical Analysis

By:
Christopher Lewis
Updated: Aug 25, 2015, 07:11 UTC

Gold markets tried to rally during the course of the session on Monday, as the global markets all fell apart. There was an initial rush into safety as we

Gold Prices August 25, 2015, Technical Analysis

Gold markets tried to rally during the course of the session on Monday, as the global markets all fell apart. There was an initial rush into safety as we reach towards the $1170 level, but as you can see we turned back around by the end of the day. We ended up forming a shooting star, which is the same thing that we formed on Friday. This tells us that the market is starting to get a bit exhausted at this point in time, and with that it is probably only a matter of time before we see a breakdown.

If we can get below the $1150 level, it would be a nice selling opportunity in our opinion. After all, we have struggled quite a bit to get to this area, and it took a massive and impulsive move in order to make it happen. With this, you can see that we have gone a little too far in far too short of a time period, so having said that it makes sense that we would have trouble keeping up the momentum.

The US Dollar Index fell apart during the course of the session as well, but we do get a significant bounce. Then significant bounce could of course move the markets back and forth, as the US dollar typically will move opposite of gold and vice versa. That doesn’t necessarily have to be the case, but at the end of the day it is a correlation that we see quite often.

If we do get the breakdown, we expect this market to head to the $1125 level, which of course is the beginning of the next major cluster below. We believe that ultimately there could be buyers in this area, but if we do not hold above the $1110 level, this market should continue to break down significantly below there. With this, we could add to a short position. On the other hand, we have no interest in buying unless we get some type of pullback as it would represent value. There is a lot of noise above, and it is going to be difficult to break out to the upside from here.

 

 

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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