Gold Price Outlook – Gold Continues to Grind on Tuesday

Gold Technical Analysis

The gold market looks like it’s slightly positive in early trading on Tuesday, but we are still stuck in the same consolidation area that we’ve been in just above $4,200. The $4,200 level of the course is a large round, psychologically significant figure and an area that’s been both support and resistance over the last couple of months. So, it does make a certain amount of sense that it is holding the market up. If we break down below $4,200, then we could go looking at the $4,000 level over the longer term, which is sitting just below the 50-day EMA.

Ultimately, think gold is just waiting to see what Jerome Powell has to say at the press conference on Wednesday, as it gives us a bit of a heads up as to where we are going from an interest rate perspective at the Federal Reserve. If he sounds overly dovish, that will really push the gold market higher. The interest rate cut itself won’t happen because it’s already known. If gold can break above $4,400, then it opens up the possibility of $5,000 an ounce longer term, which I do think is a very realistic possibility.

We may, although it’s still early, be in the process of trying to form some type of uptrending channel after the recent pullback from $4,400, but it’s a little early to make that call. But as we go into the end of the year, a lot of times markets will calm down for the last week or two. So, we may get a little bit of volatility after the FOMC situation and conference, maybe a couple of days of movement, and then sideways action. Either way, I have no interest in shorting gold. It is far too strong.

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