As we have mentioned in our previous forecast, XAUUSD reached 1208 USD.
Market players saw that the strategy of quantitative easing has ended and FED will continue walking on the new path. Booming U.S. economy, rising interest rates, and rising bond yields will all help to support U.S. dollar strength. Recent gains in the DXY have had a direct impact on gold, pushing prices lower. This trend could remain intact until the process of quantitative normalization has run its course.
Gold’s bearish momentum can also be seen in the exchange-traded products sector.
We have mentioned several times, it is not a right time to buy gold as long as the prices remain below 1250 USD.
Bigger charts are indicating the continuation of the bearish trend. Price is below EMA 100 on the weekly chart. RSI came into the oversold region. But in the monthly charts, RSI has more rooms downside.
1204 and 1198 are the key levels. The problem will start if Gold prices break below 1198. Fibonacci 61.8% of the latest Bullish Move – Nov 2105 Jul 2016 – will be the decision level: 1187 USD.
Key Levels on the SMALLER chart timeframes: