Gold markets fell significantly during the week, slicing through the $1225 level. This is a very negative sign, and the market should then go looking towards the $1200 level after that. If we break down below there, the market should continue to reach towards the $1100 level, and then eventually the $1000 level. As we roll over and below the $1200 level, I feel that the gold markets will completely collapse, especially if the Federal Reserve insist on raising interest rates, which it does look like they are going to do. I remain very bearish of gold because of this, and with the jobs number coming out on Friday showing such strength, it’s likely that gold will continue to suffer unless of course a few potential flashpoints a rub.
North Korea
Ironically, the most important country when it comes to gold currently might be North Korea. This is because of the missile being fired over the last several days, and that of course has a lot of attention by world leaders. However, it does not have a lot of attention when it comes to the markets, and I suspect that if the markets were to suddenly worry about North Korea, it would be brutal and vicious, and could send the market straight through the roof when it comes to safe haven such as gold. Ultimately, I believe that the gold markets will continue to find themselves under serious pressure, and that the markets will continue to favor the interest rate situation more than anything else, as it looks like the US dollar and other currencies will gain against precious metals as interest rates offer attractive opportunities. Quite frankly, if we don’t have some type of massive geopolitical issue, this market doesn’t have much to support it.
Gold Technical Analysis Video 10.7.17
This article was originally posted on FX Empire