Gold May Tests $1950 Before It Rise

There are no big signs of the dollar strengthening in recent times. However, the Fed has so far been in favor of raising bank rates. But the reality is that although it is possible to temporarily support the USD by increasing the bank rate, eventually the USD won't get an advantage against gold and overall commodities unless Iinflaton drops.



As it was initially thought, due to the sanctions of America and the European Union, Russia will suffer a lot. In reality, although Russia is suffering but America or its allies could not benefit much. Due to these reasons, negative sentiment has been created for America. And recent US economic reports are not very favorable either.



Two American banks have gone bankrupt. Due to the dollar crisis, many countries are withdrawing from dollar transactions day by day. A strong dollar is certainly harmful to the American economy as well. After all, the Fed may not want the dollar to strengthen too soon too fast.



However, as the dollar will continue to weaken further, But we shouldn't always buy Gold. There is something to say about price action and market correction. Gold is now close to the correction zone, although the market sentiment for gold is very positive.



In case, if the job market report comes positive next week, then gold can easily test 1950 dollars. At least for the price action. But, if the NFP prints negative than forecast for the next week, gold has a better chance to test $2000/2013.



There is a strong trendline resistance near the $2000/2005 price zone and immediate resistance identifying near the 2013 price zone. If NFP doesn't print super negative, I don't think gold will easily break above the 2015 price zone till it drops first and test $1950.



From the present circumstance, 1975 is identified as good support. Breaking below 1975 will open the door for the 1950 price. I think 1950 is a good zone for buying gold with a small stop loss.