Gold Price Analysis – Gold Continues to See Momentum

Gold Technical Analysis

The gold market has broken higher and broken out of its little consolidation during the early hours on Monday in a sign of strength. Ultimately, this is a market that I think continues to attract buyers on dips with a particular interest in the $5,000 level. The $5,000 level, of course, is a large, round, psychologically significant figure, but I also recognize that a lot of people would be interested in the short-term drop that offers a little bit of a reprieve in the upward pressure, as it would offer a lot of value.

We did get overdone not too long ago and I think it does make a certain amount of sense that you would have traders looking to take advantage of cheap gold but also working some of that froth off. We crashed into the 50-day EMA. We have gone higher since then and I do think that the longer-term outlook for gold is most certainly higher, as there are so many tailwinds out there pushing the markets higher.

Market Indicators and Long-term Outlook

With this being the case, I believe that it’s an impossible market to short and I think as long as we can stay above the 50-day EMA we should continue to go much higher. I in fact believe that it is probably a situation where traders might go looking to the $5,600 level and beyond.

We are still very much in an uptrend with central banks around the world buying gold, lots of monetary policy easing—not all central banks but most—and of course plenty of geopolitical tensions. With all of this, it is becoming increasingly obvious that this is a one-way situation that people have to watch closely.

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