Gold Price Outlook – Gold Continues to Grind on Thursday

Gold Technical Analysis

The gold market has dropped a bit during the early hours here on Thursday as we continue to consolidate just above the crucial 50 day EMA. The market has been going sideways for a minute now as we are in the middle of a larger consolidation that measures $300. The $3,200 level underneath is significant support, while the $3,500 level above is significant resistance. As we are at the dead center of this or close enough to it, I suspect that gold’s essentially at fair value.

After all, we spent the better part of two years rallying, and now we are working some of that froth off. Gold does this occasionally, where it will shoot straight up in the air, it’ll consolidate, and it’ll shoot straight up in the air again, and then consolidate for a long time, and then shoot straight up in the air, and then consolidate, and so on. I think we’re just in another one of those timeframes.

It just so happens that this is the summertime, and the summertime is typically pretty quiet for trading in general. So, I think you’ve got a situation where gold is just grinding back and forth. If we get anywhere near the $3,200 level, I’d be very interested in buying any bounce. If we get anywhere near the $3,500 level, I won’t be a seller though, despite the fact that I expect it to hold because eventually it should break. And if and when it does, that leads to a measured move of $300 towards $3,800.

And I don’t see any reason why that won’t happen sooner or later. The question, of course, is, can you be patient enough to wait for that bigger move? If you’re a shorter-term range-bound trader, this is a great market right now. But you have to keep in mind that you are going to be in a situation where if you see the profits, you need to take them.

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