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Gold Price Forecast – Gold Market Likely to Work Off Froth

By:
Christopher Lewis
Published: Apr 17, 2024, 13:01 GMT+00:00

The gold markets have gotten too far ahead of itself, and it now looks like we are going to do something about it. Ultimately, this is a bullish market, but it needs to take a break.

In this article:

Gold Markets Technical Analysis

The gold market on Wednesday was rather quiet as we continued to hang around the $2,400 level, suggesting that perhaps, maybe we have some work to do to continue the upward momentum. After all, gold markets have been on fire recently, and therefore it’s not overly surprising to think that perhaps we are overbought.

The 50 day EMA is reaching the $2,200 level, and therefore, I think you have a situation where the market may come back a bit, but certainly there are plenty of buyers underneath. There are geopolitical tensions out there galore that could make gold attractive. And at the same time, we have central banks out there willing to buy it.

So, with all of that being said, it does make a lot of sense that we could go higher. That being said, gold desperately needs to either go sideways for a while or pull back. The RSI is currently above 70 and that, of course, is an overbought condition as well. So, all things being equal, we either will work off this excess via a pullback perhaps to the $2,200 level, or we may just simply use time to work off the excess as we go sideways.

I don’t like chasing the market all the way up here, as this is a major move, and it makes sense that we would see a lot of volatility in the market over the short term. The market is still bullish, but at this point, I think you have to assume that chasing is going to be a major problem if you attempt to do so.

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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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