Gold price fell below the $1,900, unable to keep a bullish bias. One week ahead of the all-important American elections, the price of gold faces tough resistance ahead. It formed a double top at $1,930 and now threatens to break from a triangle as a reversal pattern.
The U.S. elections remain the dominant theme in financial markets this week. The USD direction influences all financial markets, including the price of gold.
Millennials Favor Bitcoin Over Gold
One of the most interesting remarks about the gold market came recently from JP Morgan. The U.S. investment bank sees the cryptocurrency market as a threat to the gold price, as millennials favor Bitcoin and other cryptocurrencies instead of the alternative offered by gold.
However, the same bank argues that if Bitcoin stands to compete directly with the gold market, it needs to surge more than ten times from the current levels. In any case, the fact that millennials look for cryptocurrencies as alternative investments instead of gold and gold ETFs, poses a threat for the gold price in the medium to long term.
Gold Price Technical Analysis
The $1,930 level acted as resistance for the price of gold. The rejection there led to the price breaking the series of higher lows that it formed since the $1,860 bounce.
To trade it, bears may want to wait for the price to break the lower edge of the contracting triangle. Moreover, only a clear break of the $1,880 level would put gold on a bearish path and opens the gates for a move below the $1,800.
As mentioned earlier, this week it is all about the USD. Therefore, a move higher in the USD against other fiat currencies should reinforce the bearish thesis here. On the flip side, a move back above $1,930 area will invalidate the double top and the triangle as a reversal pattern.
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Gold Price Forecast
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