IronFX: Gold traded in a consolidative manner on Monday, staying below the upside support line taken from the low of the 30th of May, but above the 1330 (S1) support zone.
I still believe that the break below the aforementioned upside support line has turned the short-term outlook cautiously negative.
Therefore, I would expect a break below 1330 (S1) to initially aim for the 1320 (S2) barrier. Looking at our short-term momentum indicators, I see that the RSI turned down again, but the MACD still shows signs that it could bottom. Therefore, I would stay careful of a minor rebound before the next negative leg.
Switching to the daily chart, I see that the metal is trading above the uptrend line taken from back at the low of the 17th of December.
In my view, this keeps the longer-term picture positive, but given that Friday’s tumble printed a lower peak and that I see the prospect for a short-term downtrend, I prefer to take the sidelines for now with regards to the longer-term outlook.
• Support: 1330 (S1), 1320 (S2), 1312 (S3)
• Resistance: 1343 (R1), 1350 (R2), 1358 (R3)
FFC is forecasting the price of gold to be $1298 per troy ounce for July 2016, up from June’s average of $1274.99. The price of gold is projected to trend down in the coming months in phase with crude oil prices.
The forecast below breaks down predicted average gold prices by month.
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