Gold Price Forecast – Gold Markets Continue to Drop Like a Stone

Gold prices plunged again during the trading day on Wednesday, as we continue to observe huge gains in the US dollar.

Gold market sought to climb at the beginning of the session on Wednesday but then came down pretty considerably to show signals of gloom. Ultimately, this is a market that is going to continue to face a lot of negative pressure now that we are breaking below the $1750 level. Rallies at this point in time should be a selling opportunity, at the first symptoms of tiredness. The $1800 level above is a massive, round, psychologically significant number, which is also a region that is not only psychologically important but also the sideways consolidation area.

After the enormous bearish candlestick from the Tuesday session, it signals that we will see a little of follow-through, especially as we close that the very bottom of the range. Ultimately, when you have candlesticks like this, there is normally a little of follow-through going forward. After all, candlesticks like this do not happen in a vacuum.

If we were to break above the top of the candlestick from the Wednesday session, effectively the $1815 level. If we were to see the market break above there, then it would be a full turnaround and certainly a highly optimistic move. In such case, the market is more likely than not going to be probable to run to the $1850 level.

Pay special attention to the US dollar and the interest rate situation in the United States, since when they both strengthen, it works against the value of gold pretty substantially. The market is more likely than not going to continue to see more of a “fade the rally” sort of approach, and it is something that should be paid attention to.

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