Gold markets broke down during most of the week but had a strong turn around to reach towards the bottom of the trend line marked on the chart below.
Note: The trendline is much more visible on the daily, and suggests a potential Head & Shoulders pattern forming.
That said, gold is setting up to be an interesting trade in here.
We would need to see a daily close above 1290 – 1300 level in order to start buying the precious Yellow metal. There is strong resistance at the psych mark, and at the slightest but of more USD strength, and gold rolls over.
The alternate scenario is that gold continues North, and if it were to take out the highs of the last 2 weeks, then it looks towards 1350 in the near term,.
Longer-term, it looks difficult.
Look at the daily sees a very Bearish candle, that would justify the Head & Shoulders pattern that shows itself on the daily and could send this market due South to 1225.
The Buck is likely to have a Bearish effect when it comes to where this market goes, and it should be noted that it has been volatile due to a lot of concerns about global growth.
Should you decide to play in the gold market then pay attention to the charts and .DXY to trade successfully.
Have a terrific weekend
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