Gold Price Analysis – Gold Looks for a Reason to Bounce

Gold Technical Analysis

The gold market has pulled back just a touch during the trading session on Monday in the Asian and European markets, but the $4,000 level still offers a significant amount of support. Ultimately, this is a market that I think continues to see buyers on dips, and I think $4,000 will continue to be a very important level to watch for traders.

If we were to break above the $4,100 level, it opens up the possibility of a move to the $4,200 level. I do think there is still a lot of concern out there in the gold market, but a little bit of a short-term sideways action and perhaps even a bounce might open up the possibility of a return towards the 200-day EMA. On the other hand, if we break down below $3,900, that could send the gold market lower, perhaps down to the $3,500 level.

Ultimately, though, this is a market that I think will continue to look more or less at interest rates and see what they’re doing, and of course, more importantly, probably the US dollar. Gold, I think, probably has some issues for a while, but longer term, I’m a big believer in the gold market. But we need to watch $3,900. If it breaks to the downside, we’ve got a deeper correction. It does make a certain amount of sense that $4,000 offers a little bit of a barrier, so don’t be surprised if the market gets a little sleepy here, perhaps just hanging around in this general region.

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