Gold futures gained $8 between 10:30 and 11:30 a.m. Eastern time on Tuesday. The key question is: is this meaningful for the ongoing trend(s) or not? Stated differently, do we stick to our bearish forecast or did yesterday’s rise change anything in the bigger scheme of things?

Since our last post It’s official: Gold price breaks down, gold has been continuing on its downtrend. In that same article, we mentioned the following:

We believe, with this week’s price action, the odds favor a continued breakdown in the gold price and gold miners, for sure in the coming months. The only possibility of a false breakdown is that gold prices recover really this week, and move back above $1250. That is because the $1220 area could provide some support, but it really has to happen “right here right now”.

The chart below shows how Gold price has fallen off the triangle pattern and hasn’t regained it since.

We still stand by that statement and those key levels. What might be behind the recent price action is likely the Fed speakers scheduled for conferences this week combined with the fact that Bank of Canada is expected to announce its decision on interest rates this week. The decision will be announced tomorrow July the 12th at 10 am eastern and this is the first time in 7 years that there is a high likelihood that the BoC might actually increase the interest rates.

The document below was put together by the RBC economics Team and illustrates what led to the expectations of a rate hike building up, mostly based on improved business sentiment and hawkish messages.

Regardless of the outcome, our readers need to keep in mind the overall Gold trend when watching the market reaction to the Bank of Canada’s decision on rates. That trend is still bearish and a rate increase might actually accelerate the materialisation of our Gold price Forecast. We might therefore see Gold reaching $1100 soon and if that doesn’t hold, $1000. At InvestingHaven, we would welcome such a price discount. It would be an amazing buy opportunity … and that will come probably at a time when even the strongest gold bull on this planet will throw in the towel.