Gold Price Analysis – Gold Continues to See Buyers in Risk Aversion

Gold Technical Analysis

The gold market pulled back just a touch during the early hours here on Thursday only to find buyers again as we continue to see a “buy on the dip” type of situation. Dropping from here opens up the possibility of testing the $5,000 level, an area that I think is going to be important not only from a psychological standpoint, but from the point that it has offered support a couple of times already. The 50-day EMA is racing towards the $5,000 level as well, so I think all things being equal, it is a well-supported market.

Central Bank Demand and Long-Term Targets

Central banks around the world continue to buy gold in general and that puts in a bit of a permanent bid, but we also have so many issues around the world that could push gold higher, especially the war in the Middle East, and therefore I think you’ve got a situation where we could go higher and I think we probably will over the longer term with a target of $5,500.

If we can break that area, then it opens up the possibility of a much bigger move. If we were to break down below the 50-day EMA then it’s possible that we could go to the $4,600 level, which is an area that I think is essentially the floor in the market at this point. Ultimately, I’m a buyer, I’m not a seller. I do think gold eventually goes much higher over the long term, as there will continue to be several reasons to think we are going higher here.

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