At the start of the year, gold buying was strong, but the next day, prices began to drop. This was due to the U.S. ISM Non-Manufacturing Index being lower than expected and aggresive comments from the Richmond Federal Reserve president, who said, “A longer period of restrictive interest rates is desirable.” These factors caused U.S. long-term interest rates to rise, leading to stronger demand for the dollar. As a result, gold prices reacted by falling.
This week, the U.S. ISM Manufacturing Index and the highly anticipated U.S. Employment Report are scheduled to be released. Since both European and U.S. investors have reduced their positions, the market could see big moves once a clear direction emerges.
If gold breaks above the neckline of the double-top pattern around 3660, the next target could be around 2720, which is at the same level as the double top.On the other hand, strong support is expected near the low point of 2580, set on December 18 of last year. Prices may stop falling before reaching this level.
This Week’s Gold/Dollar Forecast Range: 2655–2580
Note: The above information does not guarantee profits. Please make your own decisions when trading.