Gold Price Outlook – Gold Continues to See Buyers

Gold Technical Analysis

The gold market has broken higher during the early hours here on Monday, breaking out of a short term consolidation area. Longer term, it’s likely that we will go looking towards the $3,500 level, but I also recognize that we have a situation where gold is very choppy and very noisy. So, while I do like gold in general, I also recognize that you’re probably going to be looking for short-term dips for buying opportunities to find some type of value.

I have no interest in shorting gold, although I fully recognize that we could drop to the 50 day EMA again or even $3,200. But over the longer term, we have been in a strong uptrend. So, I do not want to fight that. And therefore, I just look at each and every dip as a potential opportunity.

But eventually we will have to make a bigger decision. If and when we can get close to above the $3,500 level, it’s very possible that we have a move to $3,500 leading to $3,800 based on the measured move of consolidation. There is a lot of speculation that the Federal Reserve will eventually cut rates, and if they do, that weakens the US dollar and, by extension, quite often at least, strengthens gold.

Furthermore, there are plenty of geopolitical concerns out there that people are worried about. And of course, central banks around the world continue to hoard gold anyway. So, I don’t see the trend changing. I just think we’re working off some of that excess froth from the run up to this level.

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