Gold Price Forecast – Gold markets volatile for session on Wednesday
Gold markets chopped around during the day on Wednesday, showing signs of life as the US dollar got beat up a bit. However, I do see significant resistance above that could come into play, so therefore I’m not willing to throw a ton of money at this market.
Gold markets were very noisy during trading on Wednesday, as we continue to see a lot of volatility around the world. The US dollar got a bit of a beating during the day as James Bullard suggested that an inverted yield curve could cause a recession. Everybody on Wall Street knows that, except for currency traders it seems. However, at the end of the day the Gold markets continue to face a lot of selling pressure due to the US dollar strength longer-term. There have been a lot of concern with emerging markets, and that should continue to be the case. I also recognize that we are a bit range bound, although I think there is some upward pressure to be found eventually. If we do break above the $1208 level, that would be a good sign. In the meantime, I think that rallies are selling opportunities on signs of exhaustion, as gold simply can’t seem to get its act together longer-term.
I like buying physical gold when I get a chance, but obviously that’s a long-term play. In the short term, I think you need to continue to look at this as a range bound market and pay attention to recent highs and lows. The market certainly has more of a downward slant to it, but I also recognize that participants will be following the US dollar. The easiest way to do that with gold is to pay attention to the EUR/USD pair. If it rises, typically gold will as well.
