Gold Price Forecast – Gold markets gap but give back gains

Gold markets gapped higher to kick off the trading session on Thursday in a sign of strength. However, we can see that the sellers have come back into this market place to form a somewhat bearish looking candle stick.
Christopher Lewis
Gold daily chart, March 22, 2019

Gold markets gapped at the open on Thursday, then reached towards the $1323 level before rolling over. By doing so, the market has formed a relatively negative candle stick, but I do think that there is significant support underneath as well. For example, the $1300 level underneath should be supportive, just as the 50 day EMA that sits right underneath it should be. In the short, I think that what we are looking for a bit of a pullback in order to offer value to traders. At this point, it’s very likely that Friday may be a slightly soft session, but I don’t necessarily think that we are going to break down significantly. This is a market that will continue to see a lot of volatility, as it will move in relation to the US dollar.

Price of Gold Video 22.03.19

If the US dollar rallies, that will work against gold in general. However, if the US dollar sells off after the Federal Reserve suggested that it was going to be relatively loose with its monetary policy, then it’s likely that the gold market should benefit from this. That being said, it’s somewhat obvious that there is a significant amount of resistance in the form of $1325, so with that it’s likely that the market continues to find trouble above. Looking at this chart, I suspect that we are going to have a couple of tough days of the consolidation going forward, so that’s my base case scenario. Quite frankly, it wouldn’t be the worst trade to simply sit on the sidelines.

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