Price Points To Watch In The Gold Market

For those like myself who remain strongly bearish on the US dollar, gold is an appealing buy, and a key indicator of the dollar’s health. With that in mind, let’s look at a few charts to help us identify key price points that gold and currency traders should watch and base decisions off.

The chart below is a weekly chart of gold. Note the moving averages are bearish, and that the market has been consolidating for the past four weeks, albeit on relatively low trading volume.

Below is the daily chart. The trend is bearish here as well, as indicated by moving averages as well as a downward channel in the making. The daily chart also shows key support at 648, confirmed as both a previous key price point as well as a major 61.8% Fibonacci retracement level at that point as well.

For short-term traders, the 20 day exponential moving average has been serving as resistance, and is currently just below 750. Given the current bearish trend in gold, traders may want to consider shorting gold should the market break below the 50% Fibonacci level at 721 with a target of 647 and a stop-loss at 750.

Fundamentally, I am still bullish on gold given the factors pointing to a weak US dollar. With that in mind, I’m looking for gold buying opportunities. While I think gold is a great long-term buy at this price level, an even better opportunity would be if the market drops to 648 and bounces off it. Also worth noting is that Iran recently switched its reserves to gold, which I would view as a bullish sign for gold.

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