Gold Forecast And Technical Overview
Fundamentals: After testing the 1218 resistance, the Gold price dramatically dropped and broke below Fibonacci 61.8 of the 2016 rally.
The last major Gold rally occurred at the end of 2016 when gold gained roughly 240 USD as it traded from 1,124 to 1,363 in September of last year. After reaching the high, gold prices corrected approximately 50% before bottoming at 1,240 per ounce in December. Gold bulls made three attempts to break higher but without a success.
The most important factor pushing gold prices lower is a strong risk-on market sentiment. Equities continue to gain value and investors are making the profit. The second major factor is dollar strength, which continues to be the most substantial force weighing on gold pricing.
The last factor is that the safe-haven appeal of gold during times of geopolitical uncertainty has faded out. It is now the U.S. dollar which becomes the most predominant safe-haven vehicle.
As we have mentioned in our latest forecasts, 1187 is one of the key levels. Technical indicators suggest that the Gold is oversold. However, fundamentals are indicating a further drop.
Fibonacci 78.6 – 1178 USD – will be the key level if the prices break below 1187 USD. If we see the prices make daily closing below 1178 it is likely the prices will test 1156 USD.
1218 USD is the first key resistance. And the bearish pressure continues as long as the price holds below 1218.
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DISCLAIMER: This is a technical analysis study, not an advice or recommendation to invest money
Gold Forecast: Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. Chartreaderpro does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility