Gold Weekly Price Forecast – Gold Markets Pull Back to Test Support

Gold markets have fallen a bit during the course of the week to reach down towards the $1750 level. That is an area that I think would be worth paying attention to, due to the fact that it was major resistance previously, going back to March of last year. Now that we have seen this area retested, it is crucial that we hold and rally from here. It is a potential double bottom, but if we were to break down below the $1750 level, that could be a very negative sign, perhaps sending gold down a couple of hundred dollars.

Looking at the candlestick, it is still somewhat of a negative looking candlestick, but it should be noted that the Friday candlestick was a hammer, showing signs of support. The question now is whether or not we can continue to push to the upside? A lot of this could come down to the bond market, which has seen the 10 year yield rise rather rapidly. As long as the interest rates in America continue to rise, it could work against the value of gold as it is more profitable to hold paper than it is to store gold.

If we do break down, then the first area of major support is somewhere near the $1675 level, and then I think there would be a lot of psychological support near the $1500 level. I do not necessarily know that we break down, that is going to come down to the bond yields situation, so if you are trading gold you need to have a 10 year note chart open in front of you as well.