Gold Price Analysis – Gold Likely to Continue to See Buyers Despite Volatility

Gold Futures Technical Analysis

The gold market initially plunged during trading on Friday, but has turned around to show signs of strength as we are now reaching towards the $5,000 level again.

The $5,000 level of the course is a large, psychologically significant figure that a lot of people will be watching, and if we can break above there, that would obviously be a very bullish sign. Furthermore, I would not only look for a break above there, but I would like to see a daily close above there.

Between now and then I would anticipate a lot of choppiness like we have seen so far during the day but there are a whole host of reasons why the gold market should continue to go higher.

Drivers of Market Momentum

For 1, of course, is the idea that central banks out there are buying a ton of it, and 2, of course, is geopolitics. Geopolitics continues to have people really on edge, and therefore, gold helps. In a world that is laden with massive amounts of debt, it does make a certain amount of sense that some people are trying to shore up their balance sheets, specifically central banks. So that is part of what is going on as well.

And then, quite frankly, we just have a nice uptrend. One could look at this as a market that has a nice trendline here holding things together and we did not break down below it. Ultimately, I think this is a market that does go higher, but a little bit of stability probably goes a long way over the next couple of days.

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