When you see this chart, you can also see that we have been in a long-term downtrend, and it’s worth noting that the US dollar itself is strengthening based on tightening concerns. With the Jackson Hole Symposium going on this week, it does make a certain amount of sense that traders are focusing on the speeches of central bankers. If they are going to continue to tighten monetary policy, that works against gold, due to the fact that the interest rates will be higher, and therefore it’s easier to make a return holding paper than it is storing gold.
See where Gold is headed next
The candlestick for the trading session on Monday is relatively negative, but it’s not necessarily something that I’m overly concerned about. I believe that the market is going to not only pay attention to the $1725 level, and then again at the $1690 level. That’s an area that needs a hold in order for gold to perhaps keep its head above water. If we were to break down below that level, then the market is likely to go looking to much lower levels, with perhaps an eye on the $1500 level.