Why Gold Could Go Lower
Gold bugs, hit the snooze button.
The precious metal traded lower Tuesday morning due to a strong U.S. dollar as the International Monetary Fund cut its global growth forecast to the lowest levels since 2009. It seems the news is putting pressure on the price of gold, although it closed above its support level Monday, even with the slightest bit of encouragement.
The continued uncertainty surrounding Europe's debt crisis accompanied by worries that China's economy is slowing and the IMF's gloomy outlook initially gave gold a boost Tuesday, but those gains are now gone.
So what’s the game plan now?
The focus is now on Luxembourg where European finance ministers will meet to discuss the struggling economies of Spain and Greece. Gold’s high Tuesday morning runs against our resistance wall of $1,783.50 and the fail is discouraging. A continued close above $1,772.30 will be helpful, but a lack of mojo will create a least path of resistance to the downside. I see it heading lower.