Gold Price Forecast – Gold markets test crucial resistance

Gold markets continue to be very noisy but managed to break above the vital $1200 level during the trading session on Tuesday, a very strong sign. The question now is whether or not we can make another high. At this point, I’d be a buyer on a fresh, new high, with the understanding that we will face a lot of resistance near the $1225 level. If and when we can break above there, gold could really start to take off. Otherwise, a pull back to the $1190 level makes a lot of sense to build up the necessary momentum, as the market participants continue to be skittish to say the least. The greenback has been strong lately, but I also recognize that a correction was in order. Maybe that’s what we are seeing here, and that’s part of why I don’t trust this rally so much. However, you have to respect the price action, so if we do break out to a fresh, new high that’s obviously a very good sign.

What I fear is that we are only one misstep away from US dollar strength again, especially against emerging market economies. If that’s the case, those emerging market central banks and institutions tend to sell gold in order to cover losses. At this point, I think volatility is the one thing you can probably count on, with perhaps a major overhang still to be dealt with. Keep your position size small. Longer-term, I do like gold as an investment but that’s an entirely different conversation.

Gold Outlook Video 22.08.18