Gold prices tumbled Monday morning, falling below $1,900 an ounce as stocks sold off across the board. And, according to Credit Suisse, there is a chance that gold's plunge is not over until a low of $1,765 an ounce is hit.
The technical level to watch is if $1,897-37 an ounce holds. At the time of writing, December Comex gold futures were down a shocking 3.31% on the day and trading at $1,897.10 an ounce.
“Gold continues its expected consolidation following the move to our base case objective of $2,075/80. Whilst we continue to see the long-term trend higher, reinforced by falling U.S. Real Yields and a falling USD, our immediate bias remains for further consolidation above a cluster of supports at $1,897/37, which includes the 23.6% retracement of the rally from the 2018 low,” Credit Suisse said.
However, if short-term downtrend continues for longer than expected, prices could tumble to $1,765 and even $1,726 an ounce, the bank added.
“Should weakness extend, we would see scope for a deeper setback to $1765, potentially $1726,” the report noted.
Long-term, Credit Suisse is bullish on gold, seeing a potential upside of $2,300 an ounce.
“We look for an eventual move above $2075 with resistance seen next at $2175, then $2300. Whilst we would look for a fresh consolidation at this latter level, a direct break can see potential trend resistance at $2417, with scope seen for $2700/20 over the longer-term.”
Reference: KITCO
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