The Gold market looks very likely to continue to see the $1680 level, which is an area that has been important multiple times in the past.
The downtrend line above would offer a lot of resistance, and at this point I think we’ve got a lot of noise between here and there that we would have to chew through in order to even remotely looked bullish. If we do break above the downtrend line, then it’s possible that we could go to the $1750 level, possibly even the 200-Day EMA. Obviously, that would take a lot of momentum to make that happen, so we would have to have some type of shift in attitude.
At this point, I believe that the market is simply offering an opportunity to start selling again on signs of exhaustion, as the US dollar is more likely than not is going to be a major influence in that market. Furthermore, you have to keep in mind that the US dollar has been like a wrecking ball against almost everything, but there will occasionally be a bear market rally from time to time.
On the other hand, if we do break down below the bottom of the last couple of candlesticks, then we could flush down to the $1625 level. After that, the $1600 level would be the next target, perhaps even down to the $1500 level. I think every time we rally, it’s very likely that we start shorting given enough time, as we have been in such a relentless downtrend for so long. Whether or not we change that downtrend will have a lot to do with the Federal Reserve and of course its monetary policy as well as any shift in its language. Pay close attention to the interest rate market, because if rates start to rally again, then it’s possible that we could see gold really get hammered at that point. Remember, hope burns eternal so there will be plenty of people out there trying to “front run” a Federal Reserve pivot, thereby causing volatility.