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
This article was originally posted on FX Empire
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