Gold Price Forecast – More Losses To Follow Below $1235?
- – There was a downside move in gold price, as it moved below the $1238 support against the US Dollar.
- – There is a major bearish trend line formed with resistance at $1235 on the 4-hours chart.
- – The US ISM Non-Manufacturing Index released by the Institute for Supply Management (ISM) posted a rise from 56.5 to 57.6 in Feb 2017.
US ISM Non-Manufacturing Index
The US recently saw the release of the US ISM Non-Manufacturing Index for Feb 2017 released by the Institute for Supply Management (ISM). The market was not expecting any change from the last reading of 56.5 in Feb 2017.
The outcome was above the forecast, as the US ISM Non-Manufacturing Index posted a rise from 56.5 to 57.6 in Feb 2017. The report mentioned that “This is the highest reading since October 2015 and represents continued growth in the non-manufacturing sector at a slightly faster rate.” On the other hand, the US Services Purchasing Managers Index (PMI) for Feb 2017 released by Markit Economics posted a minor decline from 53.9 to 53.8.
Overall, the US Dollar gained pace lately, which is why gold price remained under pressure, and moved below the $1240 and $1238 support levels.
Gold Price Technical Analysis
There was a rejection near $1263 in gold price against the US Dollar, which pushed it down. The price traded lower and broke many support levels like $1250, $1240 and $1238 on the way down. There was also a close below the 100 simple moving average (H4) at $1238.5, igniting further pressure.
The price traded as low as $1222 from where a recovery was initiated. The price is currently trading around the 23.6% Fib retracement level of the last drop from the $1263 high to $1222 low. However, it facing a crucial bearish trend line with resistance at $1235 on the 4-hours chart.
It won’t be easy for the price to break it. The 100 simple moving average (H4) and the 38.2% Fib retracement level of the last drop from the $1263 high to $1222 low are also waiting on the upside at $1238.50 to prevent gains. Overall, any major upside might be limited in gold price, and it remains at a risk of more losses below $1235.
