Gold and the US$

Last week’s Gold close below key $1,145 was the first close below this support level since April 2010 and the importance of this break had been noted in my w/e update. The close below $1,145 also came with a close below the key 61.8% fib level of the last major swing high move (2008-2011). This is rather bearish for Gold and suggests lower targets to come however US$ strength has been one factor that has punished Gold and traders will be watching to see how the US$ behaves as it heads to test the key 100 resistance level again. The success or otherwise of the US$ at the 100 level may help to shape further moves on Gold. 

Gold monthly: the monthly candle has yet to close but any monthly close below the 61.8% fib and $1,145 level would support a move down to the 78.6% fib near $950. This is conveniently located near the monthly 200 EMA for some added confluence. The $1,000 psychological level would no doubt add some support along the way though:


Gold weekly: the 61.8% fib and $1,145 had been tested but effective support over the last two years:


Gold daily: the weekly break of support proved to be a bit of a watershed moment yesterday though:


Gold 4hr: the $1,145 has not been tested since the weekly break. Technical theory would suggest a test of this level might evolve before further bearish continuation. We shall have to wait and see:


US$ strength has been one factor contributing to the recent fall with Gold. The US$ index continues to track higher and looks to have its sights set back on the key 100 level. There already appears to a Bull Flag in motion here but any close and hold above 100 would be very bullish for the US$ but very worrisome for Gold. A move back above 100 on the US$ would help to support the case for much lower levels with the yellow metal:

USDX weekly: watch for any close and hold above 100 as this would be damaging for Gold:


Summary: the next couple of weeks will be important for Gold to see where it, and the US$, eventually close for July. A monthly Gold close below the $1,145 would be a bearish signal and would support lower targets: $1,000 and $950. Any failure of the US$ to break back above the 100 resistance level may provide some optimism for the precious metal though. Thus, watch how the US$ tracks if it gets back up near the 100 level as any respect of this level might help to buoy Gold but any US$ close and hold above 100 would be bearish for Gold.

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