Gold Price Forecast – Gold Markets Recover After Significant Selloff

Christopher Lewis
Updated: Jan 31, 2023, 16:07 GMT+00:00

Gold markets have fallen a bit early during the session on Tuesday, but then turned around to show signs of strength again.

Gold, FX Empire

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Gold Price Predictions Video for 01.02.23

Gold Market Technical Analysis

Gold markets have fallen initially during the trading session on Tuesday, but found plenty of support underneath yet again, as we have bounced hard. Ultimately, I think this is a situation where you see the market continue to attract a “buy on the dip” type of mentality, as traders around the world are doing everything they can to protect wealth. In this environment, there are a lot of moving pieces, so I’d be very cautious about courting “all in” into this market. After all, this is a market that has been in an uptrend, and that obviously is the favorable trade direction, but with the FOMC this week, it’s likely that we will see a lot of volatility.

If we break down below the bottom of the candlestick for the trading session on Tuesday, that would be very negative, but it would not have me shorting this market. I think it would offer value if you are patient enough, and therefore I would just simply wait for signs of support near the $1900 level, or perhaps even the 50-Day EMA at the $1850 level.

All things being equal, this is a market that needs to break down rather significantly and change its attitude overall for me to get short. Obviously, the FOMC could have a major influence, so I reserve the right to change my mind by the end of the week. I doubt we change anything, but you never know as the market has not only the FOMC to worry about this week, but we also have to worry about the jobs number on Friday. Ultimately, position sizing will be crucial.

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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