Gold markets have tried to rally again during the week but rolled over to form a bit of a shooting star. That being the case I would take extreme caution when it comes to this marketplace as we formed a couple of shooting stars. That’s a very negative sign and almost always means that we are about to rollover. That doesn’t necessarily mean that we are going to be selling off drastically, but we could be looking at a pullback to find value underneath.
Gold Outlook Video 08.07.19
When I look at the longer-term chart I recognize that the $1350 level offer support, as it is not only a large come around, psychologically significant number but it is also an area where we have seen structural support and resistance before. Beyond that, we have the 50% Fibonacci retracement level there, so I think at this point it’s very likely that the buyers will return somewhere in that general vicinity.
While the US dollar does look a bit soft, the Gold markets are overbought and that’s probably the biggest driver to the downside at this point. I believe that value hunters will come back into this market looking to pick up gold on the cheap, but if we can break above the $1450 level, the market would enter a huge bullish move as it would be a bit of a blow off top. I don’t want to short gold, and simply want to find a better price at lower levels to take advantage of, something that looks very likely to happen if you are patient enough.
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This article was originally posted on FX Empire