Gold Price Forecast – Downside Move To Accelerate Vs Dollar

Gold Price Forecast – Downside Move To Accelerate Vs Dollar

  • – There was a sharp downside move in Gold price recently, as it moved below $1265 against the US Dollar.
  • – The price fell below a major support area near $1261-60, igniting a solid downside wave.
  • – Today in China, the Caixin China Manufacturing PMI for April 2017 posted a decline from the last reading of 51.7 to 50.3.

 

Caixin China Manufacturing PMI

Today in China, the Caixin China Manufacturing PMI for April 2017 was released. The market was positioned for the Manufacturing PMI Index to decline from the last reading of 51.7 to 51.2.

 

However, the result was below the market forecast, as the Caixin China Manufacturing PMI posted a decrease from the last reading of 51.7 to 50.3. The index just managed to stay in the expansion zone, but it was about 1.4 points less than the last PMI. The report stated that “Latest data indicated that Chinese manufacturers started the second quarter with a further slowdown in production and new business growth. Employment across the sector meanwhile declined at the fastest pace since the start of the year and input buying rose only slightly“.

 

Overall, the result was negative, and may put more pressure on Gold price for further losses below $1254 in the near term.

 

Gold Price Technical Analysis

There was a downside wave in Gold price this past week, as it moved below $1268 and $1265 support levels against the US Dollar. The downside move was such that the price recently broke the $1262-60 support zone for further declines.

 

Gold Price Chart US Dollar

 

The price traded close to the $1255-54 support area and started correcting higher. The mentioned correction was not sustainable, as the price found sellers near the 23.6% Fib retracement level of the last decline from the $1271.82 high to $1254.19 low.

 

The price is once again struggling and making an attempt to break the recent low at $1254. It would be interesting to see if it can break it for a move towards $1250. On the upside, above $1257, the next resistance is around the 50% Fib retracement level of the last decline from the $1271.82 high to $1254.19 low at $1261. It was a support earlier, so the same $1260-62 area may now act as a resistance.

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