It isn’t looking good for gold
When it comes to assets, a general rule is the more it tests a price, the less likely it is that the price will hold.
This is situation gold finds itself in. Gold
has been edging nearer to $1,180 again. Last year, gold found support at this level twice.
But if it falls to this level again, there’s a chance that it won’t hold and will break lower.
Have a look at the chart of the gold price below…
If gold does go through $1,180, the next support level for gold is around $1,050. That’s its high of 2008.
How low could gold go?
This year so far, gold has traded as high as $1,392, Dominic Frisby in Money Morning UK
explains. If gold falls through $1,180, and $1,050 doesn’t hold, the next big areas of support are at $850 and $730.
Many investors probably wouldn’t be that surprised if gold went down to these levels. Trends can go on for a long period of time. And gold is in a downtrend.
Gold isn’t the only metal that’s struggling. It’s a similar story for silver, platinum, copper and iron ore. Looking to broader commodities, oil is also struggling.
Commodities are battling against a downward trend. The sectors are weak. And the dollar’s strength is playing a big part in pushing them lower.
Gold needs to find a solid level of support and bounce higher. But it looks like we may be stuck in a downward trend for now.
So there you have it, what the future is looking like for gold at the moment.
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