Weekly Outlook: 2014, September 28 - October 05

Gold forecast for the week of September 29, 2014, Technical Analysis

The gold markets tried to rally during the course of the week, but as you can see fell down almost immediately. The resulting candle is a shooting star, which of course is very negative looking at the bottom of a downtrend. Where the very bottom of the consolidation that we had seen down in this general vicinity, and as a result it looks like we are going to try to make an attempt to break down below the $1200 level. If we get that move, this market could go as low as $1000. If we break above the $1250 level, at that point time we think the market would then head to the $1350 level as it would continue the consolidation that we’ve seen for some time now.

However, gold markets are very sensitive to the value the US dollar, which of course is continuing to gain serious strengthen overall. With that, gold markets probably are going to break down, and a move below $1200 would be a big surprise at all. The gold markets continue to suffer as the US dollar is being bought because of the lack of economic growth around the world, ultimately making it the only asset that a lot of traders will hold onto.

If we do break the top of the shooting star though, we feel that the market will try to pick up steam and although we are calling for a move to the $1350 level, we recognize that we could go as high as $1400 as well. With that being the case, we recognize that a decent trades set up is coming, but we need to break out of the candle from the previous week in order to feel comfortable enough to put any real money into this marketplace.

We also recognize that sooner or later we will find support, probably closer to the $1000 level, and that being the case we would be very interested in going long of gold down in that region if we get a supportive candle for a longer-term trade. However, right now things simply look to soft.