Gold price was unable to break the dynamic resistance given by a possible neckline of a head and shoulders pattern and got rejected. It is not the first time when the price of gold leads a move higher in the dollar, so one should not be surprised if this move will have ripple effects on some major dollar pairs.
For example, gold topped last year during the summer and, from above $2,000, it corrected close to $1,700. At the same time, the USD kept falling until the weakness in gold accelerated, and the EUR/USD pair showed signs of weakness too.
The name of the game in financial markets at this point seems to be in the cryptocurrencies. The new highs made by Bitcoin, Tesla’s investment, generated a lot of interest. As such, traditional investments fell into second place, but one should not forget that the bulk of the investments is in traditional investments. As such, when and if a move starts, it would move the entire market.
Gold Price Technical Analysis
The technical picture looks straightforward. The measured move of the head and shoulders pattern indicates that the gold price might reach $1,700 and below on renewed downside pressure. A move above $1,870 would invalidate the bearish setup and put pressure on bears.
Gold Price Forecast