Gold Price Outlook – Gold Continues to Look Strong

Gold Technical Analysis

The gold market has rallied again during the trading session here on Wednesday in the early hours, as we are now well above the $4,000 level. That being said, I am a bit concerned about the extension of this move because quite frankly, we are overbought by just about every metric you can imagine. So, with that being said, although I certainly wouldn’t short the gold market, I don’t like chasing. I like buying pullbacks if and when we ever get them, as they offer value in the form of “cheap ounces.”

The $4,000 level could end up being a bit of a support level now that it was a previous resistance. And with that being said, I think you’ve got a situation where the market memory could be enough to have people getting involved. If we break down below there, then we could open up a move all the way down to the $3,900 level. The previous ascending triangle that we had broken out suggested the $3,800 level as a target, but now we have blown through that. I think $3,800 will probably become the bottom of your trend, at least in the short term.

To the upside, the $4,100 level could be targeted, but I think really, we desperately need a pullback at this point. You can’t just blindly chase something that has shot straight up in the air. All things being equal, this is a market that continues to see buyers overall, as there are many reasons for this situation to continue going forward.

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