Gold Weekly Price Forecast – Gold markets looking to find support underneathGold markets fell during most of the week but had an explosive move on Friday to turn things around and form a hammer, just above the psychologically important $1200 level. I think that the market may be starting to show the first signs of a reversal.
Gold markets fell significantly during the week, reaching down towards the $1200 level, an area that has been support more than once. By forming a hammer, it looks as if we are ready to turn around and try to rally a bit, perhaps reaching towards the $1250 level, and maybe even back towards the highs over the longer-term. However, pay attention to the US dollar and what it is doing. If it starts to fall in value, then I think gold could turn things around as it offers plenty of value.
If we do break down below the $1200 level, it would not surprise me at all to see this market goes looking towards the $1120 level, and then perhaps the $1000 level after that. That is an area where I would buy as much gold as a possibly could, because it should be such a longer-term buying opportunity based upon a break out years ago. That being the case, this will simply move counter to what the US dollar does, so pay attention to the FX markets if you are going to trade gold. I suspect that if there is a time where buyers should return, this is probably it. That isn’t to say that we are going to shoot straight up, but I certainly think that the buyers are willing to take a chance in this area based upon the candlestick that we just formed. I think that the selloff has been overdone to say the least, and this is a strong demand area.