Gold Price Outlook – Gold Continues to Grind Back and Forth on Tuesday

The gold market gapped higher to kick off the trading session here on Tuesday as it looks like we are maybe trying to form some type of compression via a triangle. We will just have to wait and see. But this is a market that has been a massive move, as I’m sure you’re aware of, and now has been basically struggling with volume. So, here’s the question: is this going to end up being a consolidation area and continuation, or do we break down? I think we’ll find that out fairly soon.

Holiday Volume and Contract Rollover Impact

It is worth noting that on Wednesday, we roll over from December to February. So, there might be some noise in the market, but this week is going to be a little bit funky anyway because Thursday is Thanksgiving in the United States, which will shut down the market for quite a bit of time during the Thursday session and keep a lot of volume out of it as well. Friday will probably be pretty thin as well. Most Americans do not go back to work. And even Wednesday might be a little bit quiet. You will probably see a lot of positioning to get into the new contract, and Wednesday could just fall apart as far as momentum pretty quickly.

So, I am not looking for much here. I think we will stay in this pattern for the next couple of days. But what I’m watching is the $4,200 level. If we can break above there with any type of strength and gusto, then I think gold goes looking to the highs again. If we break down below the 50-day EMA, which is at $3,978, that is a sign that maybe we will break down below $3,950. I would consider that confirmation of a significant pullback. We will just have to wait and see. But as things stand right now, it is pretty neutral with an underlying strong bullish tone.

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