Gold price tumbled recently as it was rejected again from the $1,950 level. At this point, it appears as consolidating on the bigger timeframes, unable to distance itself much from the $2,000 level.
The price of gold is viewed as the perfect hedge against inflation. In other words, on a lower USD, the price of gold should rise. However, the last few months saw a divergence from this correlation, as the dollar declined while the price of gold declined as well.
Moving forward, if the dollar’s strength is set to continue, we may see it accelerating while the price of gold to keep staying close to $2,000. In other words, a stronger dollar and stable gold makes sense considering the divergence in the last months.
Gold Price Technical Analysis
At this point, the price of going is in neutral territory. Bulls may want to go on the long side should the market break above the $1,950 level, while bears focus on the price breaking previous support.
Aggressive traders may want to short at market and target a break of the support in the wake of ongoing dollar strength. If that is the case, they would want to place the stop above $1,950 and set a risk-reward ratio bigger than 1:2 or even more.
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Gold Price Forecast
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