Gold Price Forecast: $4,700 Resistance Signals Pullback Risk

Gold Technical Analysis

The gold market has rallied a bit during the early part of the Tuesday session, but is starting to find a little bit of resistance at the $4,700 level. That being the case, it looks as if market participants are starting to see the market as being overdone. With that, it does make a certain amount of sense that we get a little bit of a pullback, and the overdone attitude of the market may just demand that.

The $4,500 level underneath is an area that previously had been both support and resistance, so traders who see the market pull back to that area may see it as a potential buying opportunity as market memory probably comes into play there.

Technical Outlook and Key Levels

The 50-day EMA has recently broken above the 200-day EMA. It kicked off the so-called Golden Cross, something that a lot of people might be watching.

The $4,800 level above seems to be short-term resistance, but I think the biggest thing here is probably that the market has gotten a little overstretched. So, despite the fact that the interest rates in the 10-year yield in the United States and other durations have all pulled back a bit, so has gold. It’s not necessarily moving because of that, at least not during the session.

And this, I think, is just a function of being overextended short-term, really not showing anything that concerns me more than maybe not chasing. With a little bit of patience, value hunters may just get their opportunity.

Ultimately, gold is moving on headlines coming out of the Middle East, the interest rate markets, the US dollar, and everything else. And even though things are still lining up to be positive for gold based on that trade, gravity does come back.

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