Gold Prices November 13, 2015, Technical Analysis

Gold markets fell rather significantly during the course of the day on Thursday, breaking down towards the $1075 handle. We did bounce though, so it appears that the market may continue to find support in this general vicinity. Nonetheless though, we are looking for some type of rally that fails in order to start selling again. We believe that the $1100 level above should continue to be massively resistive, and with that we think that the trades that are offered should end up being based upon short-term charts. We break down below the bottom of that hammer as well, that should send this market looking for the $1000 level which is very likely at this point.

You have to look at the interest-rate expectations out of the United States in order to understand what’s going on in this market. The Federal Reserve continues to look likely to raise interest rates, especially considering that we had a pretty significant shock to the system with stronger than anticipated jobs numbers. That of course is one of the biggest barometers of the economy’s health in the United States, and that of course means that the markets will continue to pay attention to the employment figures.

Gold of course is often thought of as an anti-US dollar type of trade. With this, as long as the US dollar continues to strengthen in reaction to interest-rate expectations, it makes sense that it takes less US dollars to buy an ounce of gold. Commodities in general are getting beat down, and as a result gold probably won’t be any different.

If we did break above the $1110 level, we feel that the market could have a relatively significant rally from there, but quite frankly we have been in a long-term downtrend, and although we had a nice rally this past fall, it looks like the sellers are most certainly still in control. The $1000 level below is our target, especially considering it was so resistive many years ago when we broke out and up for the longer-term move afterwards.