Gold Price Forecast – Gold markets test major support

Gold markets fell a bit during the trading session on Tuesday, reaching down towards the uptrend line that has been so as of late. Obviously, gold markets continue to be very noisy.
Christopher Lewis
Gold daily chart, October 02, 2019
Gold nuggets on black background.

Gold markets have broken below the uptrend line initially during the trading session on Tuesday, only to turn around and show signs of support. At this point, the market looks likely to go to the upside given enough time, which makes quite a bit of sense considering that the geopolitical situation around the world continues to be a complete mess, and the ISM numbers during the trading session came out very poor, perhaps giving the Federal Reserve yet another reason to consider a loose monetary policy.

Price of Gold Video 02.10.19

The market is going to face a bit of resistance at the 50 day EMA which is currently testing the $1490 level. At this point, if we were to break above there then the next test will be the $1500 level. Keep in mind that even though we have sold off rather drastically over the last week or so, we are still very much in and uptrend and this trendline seems to be confirming that. Even if we were to break down below here the $1450 level should also offer support going forward.

Until the world suddenly becomes a much “safer place”, it’s hard to imagine a scenario where gold sells off with any lasting momentum. This doesn’t mean that the move higher is going to be easy, rather that we should go higher given enough time and therefore buying on the dips continues to be a strategy that most longer-term traders employee. I certainly feel that pullbacks offer value in this market, and therefore should be looked at as an opportunity to build a core position.

Please let us know what you think in the comments below

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