Gold markets have had a couple of very bad days, and on Friday trying to recover but quite frankly could not hang on to anything resembling gains. Because of this, the market ended up forming a bit of an inverted hammer, which is a negative sign. We are sitting right on top of the $1750 level, an area that of course has to be paid close attention to as it had been important previously. Because of this, if we were to break down below that level, I think that it would initiate fresh selling, and perhaps a very ugly turn of events for this market. In fact, we could drop all the way down to the $1680 level again, an area that has been rather important.
Gold Price Predictions Video 20.09.21
To the upside, if we break above the top of this candlestick, it is likely that gold could go looking towards the 50 day EMA, but that would be a very difficult and painful move. I would not expect that to be very quick, especially as the US dollar is working against the value of gold as we speak. Because of this, I think it is more than likely only a matter of time before we break down, as yields in America are supporting the greenback over the gold market, and I see no real change in attitude in the short term.
One thing I think you can probably count on is a lot of choppy behavior, so be cautious with your position size until we get some type of clarity. If we do break down below the $1750 level, I will become aggressively short of the gold market, because I think it opens up a bit of a “trapdoor.”
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This article was originally posted on FX Empire
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