Gold Price Outlook – Gold Continues to Look for a Floor

Gold Technical Analysis

Gold has dropped a little bit in the early hours here on Friday as we continue to see a little bit of hesitation. That makes quite a bit of sense considering that the market had plunged a couple of sessions ago, and now it looks like reality is starting to slap the market in the face.

The question, of course, is whether market participants will challenge the $4,000 level. If we break below the $4,000 level, that could send this market much lower, perhaps down to the 50-day EMA. Underneath there, you have the $3,800 level, which is an area that I think makes a certain amount of sense to reach because it was the measured move of the ascending triangle that we had broken out of, one that had been in play for what seemed like a lifetime. So, a little bit of market memory, I think, comes into play in that general vicinity.

This isn’t to say that I think you should be shorting gold. I just think that after the candlestick that we had on Tuesday, it’s hard to ignore the fact that maybe gold’s a little overdone, and it’s time to perhaps come to terms with gravity. I certainly don’t look to chase gold here. I think we’re still in a state of flux, and we’ll see whether or not we break down, but this is starting to look like a bearish flag—and that’s something I would pay close attention to.

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