Gold Forecast: Markets Suffer at the Hands of the USD

• Gold markets have fallen a bit during the trading session on Tuesday as it looks like we are going to test the $1700 level.
• If the market were to break down below the $1700 level, it’s likely that we will continue to see negative pressure, perhaps opening the possibility of a move down to the $1680 level.
• That’s where we had bounced from previously, and it should offer a significant amount of support.

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Furthermore, the $1680 level is an area that has been supported multiple times over the last couple of years, so it is likely that we will continue to see that area be important. However, if we break it down below that I think that’s a good sign that gold goes dropping down to the $1500 level. The $1500 level is an area that has a lot of psychology attached to it, so I would anticipate that there is a significant number of buyers are willing to jump into that area. Even if we break down below the $1500 level, it’s likely that the market drops even further.

Markets Wait for Labor Market Numbers

On the other hand, if we turn around a break above the top of the hammer from the previous session on Monday, that would be a bullish sign, perhaps opening the possibility of a move to the $1760 level. At that point, expect to see a little bit of resistance, so a break above there would obviously be a very bullish sign.

Keep in mind that Friday is the jobs number coming out of the United States, therefore it will have a massive effect on the bond market, the US dollar, and so on. Because of this, there will be a lot of external influence on the gold market as well, so I think now we may see a little bit of a downward slope, but it’s probably more or less a slope than any type of selloff. The US dollar continues to be a bit like a wrecking ball, although gold has its place in this type of environment. Because of this, I think the negativity is somewhat limited, but if we do break down below that level at the $1680 level, then it’s going to be a very negative market. Ultimately, this is a market that I think continues to be noisy.

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