Gold Price Forecast – Gold Markets Continue to Look Higher

Gold Markets Technical Analysis

You can see that we are a bit stretched yet again during the early hours on Monday, and it must be said that we have given back some of the gains that we initially had. Now, this doesn’t necessarily mean that it’s time to start selling gold, just that perhaps a pullback is finally coming. We’ve had a couple of minor pullbacks during the course of the last couple of days, but nothing to truly shock the market. There are plenty of reasons for gold to go higher over the longer term and therefore I look at any pullback as a potential buying opportunity, but I would much prefer a deeper correction. The relative strength index is sitting well above the 70 level, and it does suggest that perhaps a pullback could be coming.

At this juncture, I would look to the $2,200 level as an ideal entry point, assuming that we can pull back that far. And at this point, it would be about a $135 an ounce drop, something that wouldn’t necessarily be out of the question. On the other hand, if we break above the range for the day, then I think we will reach our target of $2,500 rather quickly, mainly due to the fact that there’s just so much momentum.

The reasons for gold going higher include interest rates dropping around the world, and central banks possibly collecting more gold than they had been in the past. Remember, they’ve been net buyers. And then perhaps the most obvious reason would be geopolitical tensions. So all of that does lead to higher gold prices over the longer term but it also must be said that we’ve gone straight up in the air for the last couple of weeks and perhaps it’s time to pull back a little bit.

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