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Gold Price Forecast – Gold Markets Continue to Threaten a Breakout

By:
Christopher Lewis
Published: Oct 26, 2023, 12:41 GMT+00:00

Gold markets have rallied slightly during the early hours on Thursday, as we continue to threaten the $2000 region.

Gold bullion, FX Empire

In this article:

Gold Price Predictions Video for 27.10.23

Gold Market Technical Analysis

Gold markets have rallied slightly during the trading session on Thursday, as we are trying to get to the $2000 level. If we can break above that level, then it’s possible that we could go looking to the $2050 level. All things being equal, this is a market that certainly looks as if it is trying to continue to go higher, but we have gotten to this area so quickly that it makes sense that we also have to work off some of the excess froth.

All things being equal, there are plenty of geopolitical issues out there that could continue to drive gold higher, not the least of course would be the war in the Middle East. However, if tensions suddenly drop, it’s also possible that gold sells off quite drastically. As things stand right now, it looks like the hammer from the Tuesday session is an area that you need to pay close attention to. If we were to break down below it, that would more likely than not open up gold to extreme selling. At that point, the market is likely to go looking to the 50-Day EMA underneath.

In general, this is a market that I think continues to be noisy, and we are essentially consolidating in the short term. Sooner or later, we will get an impulsive candlestick that tells us which direction we are going to go. The market will continue to be one you need to be very cautious about, and therefore you need to keep your position size reasonable as volatility will probably continue to be a major factor in this market.

When you look at the gold market, pay close attention to bond yields, because if they start to spike, it can put downward pressure on the gold market. Typically, people talk about the negative correlation between the US dollar and gold, but it’s actually bond yields that more likely than not will be the culprit. Higher bond yields drive the US dollar higher, all things being equal, so it all goes full-circle. I anticipate that the next couple of days will be more of the same back and forth, barring some type of sudden headline in the news.

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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