Thursday’s trading session witnessed a sharp decline in the gold market, with prices testing the important $1700 barrier. I consider this level to be the entry point to significantly cheaper price. There is a possibility that we may lose as much as $200 if we were to break down there. The continued strength of the US dollar is acting against the total value of gold.
In addition, you should examine the candlestick for Thursday’s trading session, which indicates severe weakening. In spite of this, the market is expected to continue to exhibit erratic behavior and may possibly have a bear market bounce. Signs of weariness near the $1750 level should be a good selling opportunity. The $1750 level should provide considerable resistance.
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On the other side, if we were to break down from here, I believe it would act as a “trapdoor” for the trend, and in that case, we may decline pretty rapidly. Regardless, I believe gold will likely struggle for an extended period of time, and as a result, it is conceivable that you will need to be extremely cautious with your position size, mostly owing to the market’s extreme volatility.
It is possible that we will observe a great deal of choppy behavior on a daily basis, but the trend appears to be pretty apparent, at least for the time being. Unless the Federal Reserve takes substantial action, it is difficult to see a situation in which we suddenly make a sustained shift.
