Gold Price Outlook – Gold Chops Back and Forth on Thursday

Gold Technical Analysis

Gold markets have gone back and forth during the trading session here on Thursday in the early part of the day, as we are trying to find a bit of a floor after a couple of vicious days of selling. At this point, I think a little bit of a relief rally would make sense but be cautious. Moves like we’ve seen over the last couple of days don’t happen in a vacuum very often. In other words, there’s probably more trouble ahead. If we do bounce from here, the $4,200 level would more likely than not end up being a little bit of resistance. If we break down below the $4,000 level, then I think the market really starts to drop, perhaps heading towards the 50-day EMA at the $3,838 level.

Gold, of course, has seen a nice rise as of late, but the last couple of days have really put some fear back into this market. That’s probably a good thing, quite frankly, because we had gotten so overdone that people on the streets were talking about gold and silver, almost always a bad sign. The US dollar has been strengthening this whole time, so I think we’ll have to see how this plays out, but there’s a good chance that gold is either going to go sideways for a while or maybe the trend is over.

We just don’t know yet. But I think at this point in time, you have to be cautious about rallies and the first signs of exhaustion. I’d be nervous after the type of drops we’ve seen. If we break above the $4,400 level, that obviously would be very bullish and open up the door to $4,600. But we’ve got a lot of work to do to get beyond that. And quite frankly, I’d like to see it take its time. Let’s get it a little bit more stable and durable as far as the rally is concerned, if we are going to continue.

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