Gold markets initially fell on Monday but found enough support near the $1205 level to bounce. However, I think that the sellers are coming back, and that the $1225 level above will be a bit of a ceiling. The Federal Reserve is looking to raise interest rates, and the whole world knows this. Because of this, there will be bearish pressure on the gold markets longer term. The real question now is whether we can break down below the $1200 level, which would be a significant break down and a very bearish move in general. A breakdown below there could send this market all the way down to the $1000 level longer term.
The alternate scenario
The alternate scenario of course is that we break out to the upside, and the clearance of the $1230 level should send this market looking for $1240 next. However, I find it a bit difficult to believe that we will see enough bullish pressure to make that breakout, and I believe that the real threat longer-term is to the downside. I fully anticipate that we will eventually break below the $1200 level, because central banks around the world continue to look very hawkish. That is an absolute toxic situation for precious metals, and it is shown in the gold markets much quicker than others. I believe the gold not only false, but it drags other precious metals such as silver and platinum down with it. Selling rallies continues to be a viable trading system as far as I can see, and once we break down below the $1200 level, I think the bearish pressure will start to accelerate, culminating to reach towards the $1000 level. I believe the gold is going to be soft against most currencies, perhaps except against the Japanese yen.
Gold Outlook Video 11.7.17
This article was originally posted on FX Empire