- The gold market gapped lower at the open on Thursday and then had seen quite a bit of volatility in what had been a basically negative market.
- As things stand right now, the market looks as if it is trying to test the $3650 level.
- This is an area that has been important multiple times, and with the US dollar spiking over the last couple of days, it has put a little bit of pressure on gold.
Technical Analysis
The technical analysis for the market is obviously very bullish, and it is worth noting that we have recently broken out of a massive ascending triangle. The so-called “measured move” from the Triangle suggests that the gold market could go looking to the $3800 level. The $3800 level of course is a large, round, psychologically significant figure, and probably has quite a bit of options waiting for it there. That being said, the market is going to continue to be very noisy, and it’s probably worth noting that the last couple of days haven’t been that stellar for gold. In other words, maybe we are getting a little stretched at the moment but given enough time it’s likely that we will continue the overall trend.
A pullback at this point in time could be supported all the way down to the $3500 level, which was the top of that ascending triangle, and where we see the 50 Day EMA currently hanging about. The market has been very positive for very long time, but the last couple of weeks have been extraordinarily bullish, so working off some of the froth either via a pullback or some type of sideways action would make a certain amount of sense at this point.
Top Forex Brokers
Nonetheless, the longer term outlook for gold remains very bullish, as central banks around the world continue to hoard gold, and of course the Federal Reserve is likely to cut rates down the road, right along with several other central banks.
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