Gold Price Outlook – Gold Continues to Hover on Monday

Gold Technical Analysis

The gold market initially fell a bit during the trading session here on Monday, only to turn around and show signs of life. All things being equal, this is a market that I think continues to see a lot of interest here right around the $4,000 level. The $4,000 level, of course, is a large, round, psychologically significant figure and an area that has been important multiple times over the last couple of months.

If we pull back from here and start falling, then I believe that the 50-day EMA is close to the $3,885 level and offers support. All things being equal, the market is likely to continue to see a lot of back-and-forth, noisy behavior. From there, I think it has to determine whether or not we can turn around and jump to the upside, perhaps going to the $4,200 level. If we were to break above there, then gold can really take off. However, if we were to turn around and break down below the 50-day EMA, then the $3,800 level will get targeted, which is the measured move from the ascending triangle that we had previously been in.

I do not have any interest in trying to short gold at the moment, although I’m not necessarily overly bullish about it either. The longer that we go sideways, the better off we are for the longer-term move to the upside. After all, gold has a lot of things working for it right now, not the least of which would be central bank buying, but I also have to keep in mind that central bank monetary policy loosening is a major factor as well.

Nonetheless, we’ve had an intense run to the upside, so sideways movement is probably the best-case scenario—and I actually welcome that as somebody who thinks gold will eventually become more bullish.

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