Gold Price Outlook – Gold Continues to Bounce Around on Tuesday

Gold Technical Analysis

The gold market has gapped lower to kick off the trading session on Tuesday, dropping to test the $4,000 level, only to turn around and bounce again and show signs of life. The $4,000 level is a large, round, psychologically significant figure, so that is important and has been important multiple times in the past. In fact, we spent about ten days just bouncing around it, and market memory may come into the picture.

The 50-day EMA is at $3,953 and rising, and I do think it comes into the picture to offer a floor. If we turn around from here, the $4,200 level will be a barrier that is difficult to break, mainly due to the fact that we made a lower high there. The question now is whether we will make a lower low. So far, we have not done that, but if we break down below the $3,950 level, then I think you have a more significant drop from there. At that point, I would anticipate that gold goes looking to the 200-day EMA, which is presently just below the $3,500 level.

If we break above the $4,200 level, then the market could go looking to the $4,400 level, which had been the highs previously, but we had seen a lot of volume come into the market at that level, and it will be difficult to chew through it. The best-case scenario, quite frankly, is that gold goes sideways and everybody gets used to the idea of $4,000 gold, and it becomes something that the market simply accepts.

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