By FXEmpire.com
The gold markets fell for most of the week but managed to close just above the open. The market is suffering right along with all risk assets like oil, as the “anti-Dollar” play is suffering. However, with the global economy looking to possibly slow down, the demand for gold could be driven by further easing by central banks around the world.
The candle for the week is a hammer, and it is sitting right above the crucial $1,500 level. The area is supportive as history over the last several months have shown, and as a result there is a real chance of a bounce from here. The highs in this market are getting lower, and there is also the hint of a descending triangle in this pair. If the triangle gives way, we could see a serious momentum and trend shift in this pair on the long term charts.
The $1,500 level absolutely has to hold if you wish to buy this commodity. While the gold markets have been massively bullish over the last ten years or so, the last 12 months have been a choppy market in general. The possibility of a bounce from this level exists, but this could very likely be a rally that provides a selling opportunity.
With the US dollar being king at the moment, there is a real “risk off “attitude around the financial world. In this type of environment, there is going to be serious downward pressure on gold as the Dollar rises. The descending triangle isn’t confirmed yet, but it is looking more and more pronounced at the moment. The $1,500 level is the absolute “floor” in the bullish case in this market for us, and as long as we are above it, we are a bit cautious on selling this market unless we get the bounce towards the downtrend line of the triangle with a weak candle. The breaking of the $1,500 level on a daily close has us selling aggressively as it would be a massive shift in momentum as far as we are concerned.
Click here a current Gold Chart.
Originally posted here
