Gold Forecast – Precious Metal Eyes Crucial $4,000 Psychological Floor

Gold Technical Analysis

The gold market has gapped lower during the open here on Wednesday, but at this point in time, the market is likely to continue to see a lot of noise just above the $4,000 level. The $4,000 level is a large, round, psychologically significant figure that a lot of traders will be watching. I think it is a potential floor in the market. If we were to break down below the $3,900 level, the market could really unwind down to the $3,500 level, and it wouldn’t surprise me at all to see that happen.

That being said, a short-term bounce is possible. So, if you are a short-term trader, that could be your plan for the day. We have pushed back a little bit against the selling pressure. US rates in a climb during the early part of the session will continue to put pressure on gold, so I’m not a big fan of buying here, but I do recognize that the technical bounce could be part of the play.

Imminent Death Cross Threatens Gold Outlook

The 50-day EMA is likely to break down below the 200-day EMA, and if it does, that kicks off the so-called Death Cross. It would not be a good sign either. That being said, the indicator does tend to lag, so that’s just telling you what you’ve seen over the last several months that gold has been in trouble.

I don’t really see anything on this chart that tells me gold is suddenly going to explode to the upside. Longer term, I like it, but right now I think we have too many things working against it for it to truly take off anytime soon.

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