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Dollar Strength Major Factor In Gold's Recent Weakness

ByGoldTradingExperts.com
Published 09/11/2014, 05:59 AM
Updated 07/09/2023, 06:31 AM

Long Term Trend: BEARISH
Intermediate Term Trend: NEUTRAL/BEARISH
Short Term Trend: BEARISH
Very Short Term Trend: BEARISH

Gold has declined steadily all week since breaking through the bottom boundary of the triangle pattern on 2 September, finding support yesterday at $1243. We suspect we may see a small bounce here, which should be seen as an opportunity to reload short positions, however there is a good chance that the gold price continues to slide.

A break of $1240 would be very bearish and suggest a rapid return to retest $1180 is underway, with a break of the key support level at $1180 likely on what would be third attempt.

The dollar strength has been a major factor in Gold's recent weakness, with surging equities compounding the misery and a tumbling oil price failing to provide support. Only a break back into the triangle pattern and a rally to (and ultimately through) the upper boundary would invalidate our bearish stance.

Support can be found at $1243, $1237-$1240, $1220-$1225, $1210, $1200 and $1180. A break of $1180 would have serious bearish implications for gold and suggest a decline to $1000-$1050 in the short term - a failure to break the 65 week MA would make this scenario much more likely.

Resistance can be found at $1258, $1263, $1271-$1273, $1277, $1290-$1292, $1300-$1302, $1310-$1312, $1322-$1325, $1333-$1335, $1340-$1342, $1352-$1354, $1392-$1395, $1400, $1420 and $1435. A second failure to break through the key 65 week MA would suggest that the intermediate down trend is intact and a retest of $1240 and possibly $1180 is likely.

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