Good day forex traders and readers.
Welcome to another gold price forecast update and it had been a ride since we last reviewed gold a month ago. In the previous gold price review we noted that it was at $1380, a drop of almost 11% from the high of almost $1800.
Looking at the Gold daily chart above we note that as per expected in our previous gold forecast, the precious metal dipped further. ( We had a few readers who wrote to us that there were bearish since the previous review and a big congrats to you ! 🙂 )
The current region of $1200 is expected to be a major support and many traders would be monitoring this crucial support strongly. Gold has lost 21% from it’s high at almost $1800 this past year. Should this support region fail, we might be looking at an extended bearish target of $1000.
With regards to the bearish momentum, it is widely believed by experts that the proliferation of gold based financial instruments such as ETFs played a major part. As traders often speculate, the continued rallies of the equities brought about sell offs as they bought into better performing markets such as equities, thus weighting down the price of gold itself.
To further implicate matters, the recent apprehension of the market towards the US Federal Reserve Ben Bernanke’s suggestion of quantitative easing tapering saw a general market sell off, starting with the equities and inevitably gold.
It would be prudent to continue to observe market sentiments in general.