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Gold Price Forecast – Gold Markets Attempting to Bounce

By:
Christopher Lewis
Published: Oct 3, 2023, 12:50 GMT+00:00

Gold markets initially plunged again during trading on Tuesday but have shown signs of life are early in the day, suggesting that perhaps a short-term bounce could be coming to the market.

Gold bullion, FX Empire

In this article:

Gold Price Predictions Video for 04.10.23

Gold Market Technical Analysis

Gold markets fell somewhat significantly during the trading session on Tuesday but turned around to show signs of life again. By doing so, it looks like the market is going to continue to attempt to find its footing, but quite frankly this is a broken market. At this point, any rally has to be looked at with serious suspicion, as it could be a nice selling opportunity.

Remember, gold markets are highly sensitive to the interest rate markets, which have been out of control as of late. With the short end of the yield curve in the United States showing spiking rates, this is toxic for gold, and could cause major issues for the market going forward. Because of this, I suspect that it is probably only a matter of time before we have to make a bigger decision, probably closer to the $1800 level.

Having said that, markets don’t go in one direction forever and a little bit of a bounce would make a certain amount of sense at this point. Because of this, I think you’ve got a situation where you are looking for rallies that show signs of exhaustion that you can sell into. In that environment, you will let the market tell you when it’s tired, and then you’ll jump into it. The $1900 level above is of course a large, round, psychologically significant figure that a lot of people will be paying close attention to, and therefore it should serve as a bit of a ceiling at this point. Whether or not it does remains to be seen, but clearly it’s a great candidate for that.

Longer term, I am bullish of gold but I also recognize that the interest rate situation has to be settled first. Eventually, bond markets will calm down, and that should be your first sign that gold could have a sustainable rally. Until then, things are going to be a difficult for those who are bullish of this market, although in the short term it looks like you may get a little bit of a relief rally after this brutal selling that we have seen as of late.

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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