Gold prices fell to a nearly two-year low amid a rise in the Dollar index to a 20-year record.
Quotes for December contracts on the New York Mercantile Exchange in trading on Monday fell to $1647, which is about 0.50%.
We can assume that rising government bond yields and a rising dollar index are the main bearish factors pushing the futures to continue their bearish trend .
From the technical analysis point of view, we see gold on the retest of the lower boundary of the previously broken channel after the false break-down of the 1634 level forms a new downward impulse, which indicates the bears’ intention to confirm the price fixation in the short zone to activate selling.
I see two scenarios at the moment: green is long (weak counter-trend scenario). If the price makes a final false-break-down and manages to return to the boundaries (above the support level at the moment) of the descending channel , it will have a potential to go up to the resistance.
But I’m leaning towards the red scenario – short (strong scenario). We can see the price consolidating under the previously broken lower boundary of the price channel – which already indicates bearish sentiment.
I assume that we might see the price fall to the support of 1574 in the nearest future
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