Gold Making Fresh Lows
It appears that the selling pressure in gold is not over with yet.The metal dropped again today to make a fresh swing low, and there does not appear to be any relief in sight.
Gold is facing tremendous headwinds on multiple fronts. The stock market continues to look poised for another run higher into new high territory. Investor confidence appears high and risk assets may continue to be bought. This may prolong the ongoing lack of interest in gold and precious metals.
The U.S. dollar index continues to march higher as well. The dollar is at multi-year highs and does not appear headed for a reversal anytime soon. Ongoing deflationary pressures in the Euro zone along with economic struggles in Japan could potentially keep the greenback well-supported for some time. While anything is possible, it is difficult to picture a sizable rally in gold with the current strength being seen in the dollar.
The notion of higher rates and economic strength is driving the dollar higher and gold lower.
The gold bears are in firm control of a market that has completed a bearish descending triangle. The completion of this pattern could potentially see the price of gold dip further to the $1000 or even sub-$1000 per ounce level.
While the longer-term trend remains down, gold will likely not go straight down. A short covering and/or relief rally will likely be soon in the coming weeks and gold could possibly test the breakdown level of $1183 before potentially heading lower again.
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06 Nov 2014 | Categories: Gold