Gold Price Technical Outlook: Bearish
- Higher rates, higher dollar continue to weigh on gold
- Technical breakdown may off up further reason to look for lower levels
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How to Trade Gold
Gold Price Forecast Continues to Be Bearish
Gold (XAU/USD) continues to decline on the back of the same factors which have been driving it lower during this entire cycle – higher rates, higher dollar. The higher rates, higher dollar theme is weighing on just about every major asset class, not just gold.
This is a theme that doesn’t look set to let up in the coming days or weeks. Next week we have the quarterly FOMC meeting, which could spark a short-term rally if gold sells off sharply into the meeting. It likely wouldn’t be anything more than a relief rally as pessimism hits a near-term extreme.
It appears highly unlikely the Fed is going to turn things around for risk assets as their focus right now is on inflation and not appeasing markets. If things get too dicey soon this stance could change, but until it does I’m going to continue sticking with the same general themes and trends.
With spot gold trying to break down below the 1680 level, any bounce from here until we see bullish price action that sticks will be viewed as transient. Technically speaking, of gold can maintain under 1680 old support become viewed as a source of resistance until it is reclaimed.
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Gold (XAU/USD) Price Weekly Chart
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—Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX