Gold has a hit a “critical” area of $1,178 an ounce due to technical factors, said Gary Wagner, editor of TheGoldForecast.com.
“If it breaks below that, I think it will go to $1,124, and if it holds in this area, our next resistance point is going to be back at $1,200,” Wagner told Kitco News.
Wagner noted that gold is not yet at a bottom and its direction from this current critical level is mainly dependent on the strength of the dollar. Importantly, gold’s relationship to the dollar is most sensitive on the yellow metal’s downside.
“If the dollar begins to weaken, we will see gold recover, but it’s not going to be the other way around,” he said.