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Gold Price Forecast – Gold Continues to Look Sideways

By:
Christopher Lewis
Published: Apr 18, 2024, 12:45 GMT+00:00

The gold market has gone back and forth during the session on Thursday, as we continue to see a lot of consolidation overall.

In this article:

Gold Markets Technical Analysis

The gold market certainly looks strong at the moment, but I think we are entering a consolidation phase. It does make a lot of sense that we do go sideways as we had gotten far too overextended. The relative strength index has been hanging around the 70 level over the last couple of days and is starting to pull back a little bit from that oversold condition. So, at this point in time, we have a couple of different potentials to work off some of the froth. We either pull back and offer a little bit of value or we spend some time working off the action itself.

All things being equal, the 2400 level above is an area that I think you’ll pay attention to. It’s a large round figure and it obviously offers resistance. But what I want to see is a couple of weeks of sideways action and then a breakout or some type of pullback, perhaps even as steep as to reach down toward the $2,200 level. That would get a lot of the hot money out of the market and present a significant value opportunity.

There are a lot of reasons for gold to continue rising, not the least of which would be central bank actions. They’re buying gold and some of them are even cutting rates or in the process of getting ready to. And, of course, there are plenty of geopolitical issues as well. So that does push the value of gold higher.

The United States issuing a trillion dollars’ worth of debt every 90 days or so certainly doesn’t hurt the case either. So, with all of this being said, I think gold does go higher. I’m just looking for a better entry price.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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