Gold Prices October 31, 2014, Technical Analysis

The gold markets as you can see gapped lower at the open on Thursday, and then continue to go even lower. We tested the $1200 level during the session, and as a result it looks like the markets ready to go lower. However, keep in mind that the $1200 level of course is an area that should continue to attract a lot of traders, so at this point in time we believe that it will continue to be a fight to get below there, and as a result we need to see a fresh, new low in order to start selling. However, it must be mentioned that the silver market did in fact break down below to form a fresh, new low, so it’s very likely that the gold market will follow suit soon.

However, you can always count on that so we need to wait and see what happens over the next couple of sessions. We believe that the US dollar will continue to strengthen, and that of course can push the precious metal markets lower, including the gold market. Ultimately, we think that this market will more than likely head towards the $1000 level but that obviously is more of a longer-term target. With that being the case, I feel that every time this market bounces, it will continue to offer selling opportunities for both short and longer-term traders, and will use resistive candles every time we do rally in order to enter the market.

At this point in time, we still anticipate that the $1000 level will be a massively supportive area, so we feel that the next leg downward will more than likely be one that’s strong and followed by most of the market, and we feel that at this point in time there’s really no way to go long of this market as it is so bearish. The US dollar should continue to strengthen overall for some time now, so as long as that’s the case, we would be very hesitant to start buying gold as the two typically run counter to each other.