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Gold Weekly Price Forecast – Gold markets break down

By:
Christopher Lewis
Updated: Aug 18, 2018, 05:14 UTC

Gold markets broke down below a major support level during the week, slicing through the $1200 level like it wasn’t even there. This was mainly due to the US dollar strengthening as people began to find themselves concerned about the Turkish lira. Because of this, the natural proclivity of gold to be inverse of the US dollar came into play.

Gold weekly chart, August 20, 2018

Gold markets broke down below a significant support level in the form of $1200 during the week. By doing so, the market looks ready to continue going lower, although we did get a bit of a bounce on Friday. I believe at this point if we approach the $1200 level, you should be looking at shorter-term charts to determine whether we can break above. If we can wipe out the negative candle for the week, that would be an extraordinarily bullish sign. However, it’s obvious that serious damage has been done to the gold market, so be cautious about that.

The alternate scenario of course is that we don’t bounce enough to do so, and we fail at the $1200 level. That would be an excellent shorting opportunity, especially BC the EUR/USD pair rollover, which is the closest thing that currency traders have as a proxy for the US Dollar Index. Either way, gold has a rough road ahead but as you know I do like the longer-term outlook for gold. At this point, I think a lot of physical gold owners are starting to pick it up based upon value. I think we probably have further to go to the downside but would be willing to start nibbling on the market at roughly $1220. If we fall from here, the $1120 level should be the next support level. Beyond that, I think $1000 comes into play.

Gold Technical Analysis Video 20.08.18

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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