FxWirePro: Gold target at $1390 scrapped; likely to decline towards $1190 in short run

We at FxWirePro, have been bullish on gold since the price broke above $1090 per troy ounce back in January 2016. During this period, gold has reached many of our forecasted targets, including the one $1365 per troy ounce, when it reached as high as $1375 per troy ounce in July 2016.  We were able to predict the then downside correction.

Despite the past performance, it now looks increasingly likely that gold price would not reach our forecasted target of $1390 in the latest bullish leg, that began in December last year when the price of gold reached as low as $1120 area. Since a false breakout in June this year around $1290 area, the price has declined to $1223 per troy ounce as of today. While gold successfully reached our short term sell target of $1225 per troy ounce, giving a short-term handsome profit of $32 per troy ounce, it seems that the call could have been extended towards $1190 area. In the chart, the bearish momentum in gold is quite visible even with a naked eye. Relatively stronger dollar, higher interest expectations around the world, weaker inflation, and lack of a major risk aversion; all contributing to the downfall of gold.

With this outlook, we are scrapping our medium term forecast of $1390 per troy ounce.

Kindly note, that we have not changed our bullish longer-term outlook yet but changed the forecast for the current bullish leg, which at the moment is turning bearish.