Gold Breaks Down Through Support As US Dollar Rallies On Eurozone Woes

Gold has broken out of its multi-week symmetrical triangle consolidation pattern to the downside, breaking through the uptrend support line at the psychologically important $1,700 level. The yellow metal’s fall was triggered by events in the Eurozone which sent the Euro sharply lower versus the US Dollar.

Chart courtesy of Stockcharts.com

As the chart below shows, the price momentum is now to the downside, however for now at least gold is holding at the 150-day moving average which has acted as critical long-term support.

Chart courtesy of Stockcharts.com

Failure to hold $1,664 would send gold towards $1,620 and a possible retest of $1,600.

Despite this recent selloff the long-term picture for gold remains very positive since governments and central bankers have little choice but to print money to try to prevent the inevitable.

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