Gold Price Forecast – Gold Markets Continue to Struggle

Gold markets initially rally during the trading session on Friday but gave back the gains to show signs of exhaustion. That being said, the market is likely to see a move towards the $1750 level, an area that has previously been resistance, so it is very likely that it will end up being support. If we can break down below there, then it is very likely that this market falls down towards the $1680 level, the scene of the “double bottom” that formed earlier.

Breaking down below that double bottom would be extraordinarily negative, as gold more than likely will go looking towards the $1500 level at that point. The $1500 level has been historically important, and I think that will continue to be the case going forward. Nonetheless, there is also the positive scenario that we need to keep in mind as well.

Breaking above the $1800 level could open up the possibility of filling the gap above, sending the market towards the $1860 level. Filling that Could run into some resistance by blowing through it would be an extraordinarily bullish sign, probably kicking off the next major move higher. Pay attention to the US dollar, because it of course has a major negative correlation to the gold markets, so if the US dollar strengthens, it could work against the value of gold itself, and of course the complete opposite would be true. One thing I think you can count on is a lot of choppy behavior, as we continue to see a bit of confusion going forward. The markets will remain at a rally, but we have a couple of levels from which to trade.