Gold Price Analysis – Gold Gets Hammered on Tuesday Morning

Gold Technical Analysis

The gold market has fallen pretty significantly during the early hours on Tuesday, but it is seeing a little bit of a bid. Quite frankly, I suspect this winds up being a buying opportunity, as war, of course, will drive up demand.

We’ve seen precious metals get absolutely walloped, perhaps mainly due to the pressure put on them by the US dollar, and of course, questions about other commodities being the next bubble, such as crude oil.

Potential Formation of a Double Top

I am watching this market. I think the $5,000 level is an area that a lot of people will be watching very closely as it is a large round psychologically significant figure and an area that has been important previously.

If the market turns around and bounces the way it looks like it’s trying to, then maybe it gets more follow-thinking towards the $5,500 level. Ultimately, this is a market that’s in an uptrend, and I think I will continue to look at it as such, looking for opportunities.

You have to be very cautious with your position size because of all of the volatility out there. I can assure you that most retail traders did not expect this market to drop about 3.5% in the early part of the session and that probably caused quite a bit of damage.

Ultimately though, longer-term it is bullish looking. The question I have is, did we form a double top at 5,500 or maybe just below it? I don’t think so, but it is starting to at least show that potential formation, so watch the dollar and watch gold for signs of a recovery.

If you’d like to know more about how commodity markets work, please visit our educational area.