E Is It All Doom And Gloom For Gold Bulls?

For those who have been looking at the price of gold via the daily chart, things perhaps have been a lot more promising for the bulls bar the last few days.

Since hitting a 5-year low of about $1,080, the price of gold rallied to hit a two month high of about $1,190 thereby triggering optimism among gold investors that the yellow metal could carry on to break the $1,200 mark again for the third time this year.

However, that wasn’t to be and the price of the yellow metal has since plunged to trade at about $1,106 per ounce thanks to Fed’s recent damaging news on the yellow metal.

Fig 1: Gold price chart, daily analysis

The price of the yellow metal has broken downwards through the current upward trending wedge which seemed set to trigger a rebound at about $1,130. Therefore, investors now have new targets, and these do not seem to resonate well with the bulls.

Currently, the price of gold seems set to touch the $1,100 mark within the next few days, while the $1,080 level now appears to be a realistic target for the next few weeks. The price of gold is currently under pressure from the strengthening USD, while the promise of a US interest rate hike does not do it any favors.

Recent events as per Investix’s latest news about Gold indicate that we could be in for a continuous decline in the price of gold, and this spells doom and gloom for gold bulls. The downward trend can be confirmed by analyzing the weekly chart, as illustrated in the figure below.

Fig 2: Gold price chart, weekly analysis

Based on the weekly chart, the next support level appears at $1,080, but when you look at the downward trending wedge, we could as well be headed for $1,040 per ounce in the next few weeks.

Based on what happens in the next couple of weeks with regard to US interest rate hike, the price of gold could fall to about $1,040 per once before the end of the month.

I have come across price predictions suggesting that the price of gold could fall below $1,000 for the first time in 7 years, but this could take some time to happen. However, the $1,000 level is not far off given that $1,040 already looks like a realistic target within the next 3-4 weeks.