Gold Price Analysis – Gold Continues to See Buyers Assert Momentum

Gold (GC) Technical Analysis

Gold finds itself well above the 5,000 level during the trading session here on Monday, but we are starting to give back a little bit of the gains. I think this is the same game we have been playing for a couple of weeks now, where the market is definitely one you want to be a buyer of, but it gets a little impulsive from time to time, and maybe somebody jumps in and gets out $25 higher to collect their profit. It is a rinse and repeat type of cycle.

Gold, of course, is being bought by central banks around the world and there are a lot of people out there with geopolitical concerns. Quite frankly, it is an overreaction, but that is what markets do. They overreact.

Potential Corrections and Support Levels

The gold price was projected to be at $5,000 an ounce sometime later this year and we are not even out of January. That puts a lot of pressure on the market to the upside going forward, but I also think that this is a situation where the exhaustion will come back into the market.

There should be a sizable correction and then there should be a buying opportunity. I am currently looking at $5,000 as potential support, but I think the $4,800 level is even more important support. To the upside, as far as a target, we do not really have one yet because all of the patterns in the past that had suggested targets have already been fulfilled. Now we are just simply in a parabolic market. I would not short this market, but I do not like the idea of chasing it either. I like to see it drop and then bounce, then follow the bounce. That way you are still with the momentum.

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