By Gold Forecast: Continues to Plunge – 20 October 2022
Regardless, I think you probably have a “fade the rally” type of market right now, especially as we continue to see interest rates rocket higher, and of course the fact that everything is about US dollars right now.
If we break down below the low, then it’s likely that we go down to the $1600 level. The $1600 level is an area that is a large, round, psychologically significant figure, and an area that I think could offer a little bit of support. However, I think it’s probably only a matter of time before we break down from there and go looking toward the $1500 level. The $1500 level of course has a lot of psychology attached to it, so I think it’s probably only a matter of time before we would see a bounce from there as well.
On the other hand, we could rally a bit from here and go looking to the $1650 level, but I think at that point we would probably see a bit of resistance as well. Regardless, you need to pay close attention to the interest rate markets in the United States, because it’s very likely that we will continue to see the negative correlation. Regardless, I think you probably have a “fade the rally” type of market right now, especially as we continue to see interest rates rocket higher, and of course the fact that everything is about US dollars right now.
Believe it or not, there is a shortage US dollar out there, and that continues to be the life out of most commodities, including gold. Nobody wants to pay for storage on gold either, considering that you can get some type of return on holding paper. Ultimately, the 50-Day EMA has been very reliable as a downtrend line, and I think we continue to drop going forward over the longer term. I have no interest in buying gold, but as soon the Federal Reserve changes its overall attitude, this will probably be a “buy-and-hold” type of market.
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