The pair of gold / U.S. dollar closed at a level lower than the opening price yesterday, where the downward movement was able to defend the level of $ 1608 USD/Ounce of gold.
The pair in a tight range recently and it seems that the decline in concern for the euro zone and the weakness of demand are working against gold price. Although the Fed returned to reassure investors that it will continue to support the economy, there are growing expectations that the central bank will reduce the size of the asset purchase program its own.
The U.S. economy has become addicted to quantitative easing, and as is the case with drug addiction, the U.S. economy began demanding larger doses (while the least impact), until it receives overdose that will lead to his death. Since the pattern is still downward in the bigger picture, I will follow up this market.
The pair has been bearish channel since October 5, when prices reached a level of $ 1795.75 USD/Ounce, and we even penetration to the outside of this channel, would not think of taking a long position, Currently. Below key level remains at the support level of $ 1591 USD/Ounce and successful penetration of this level could give the movement downward force that they have to deal with the next support at $1585 USD/Ounce of gold.
Weekly close below this level will leads me to think that perhaps we will soon test the level of $ 1572 USD/Ounce. If I got upward movement on the power again and the pair began to rise, expect resistance at $ 1608 and 1616 USD/Ounce before reaching the same level of resistance that halted progress upward movement several times during the last year at $ 1626 USD/Ounce. Do not forget that thin market conditions as a result of bank holiday in the major financial centers may worsen price movement.
written by @MElkirsh you can ask any question related to gold any time.