FxWirePro Short-term Outlook: Gold likely to decline towards $1225 per troy ounce

In our previous article in May, named, “FxWirePro: Gold breakout looms ahead”, available at http://www.econotimes.com/ we suggested that the gold consolidation is likely to continue and a breakout looms ahead, probably sometime around the end of the year or around the beginning of next year. In the following week, as US payroll report turned out to be a big disappointment, the gold price attempted a breakout from the shrinking range.

However, as we can see from the chart that breakout attempt failed for the gold and the yellow metal is now heading for its second consecutive weekly decline. The yellow metal is currently trading at $1256 per troy ounce and we suspect that it would decline further before making any further attempt to break free of the range. We calculate that gold is likely to decline to $1225 per troy ounce. A further decline towards the lower trend line of the range can’t also be ruled out.

While the hawkish Fed commentaries played its part in the decline of gold price, it was in decline already after testing the upper trend line.