Gold Price Outlook – Gold Continues to See Buyers

Gold Technical Analysis

The gold market has rallied a bit during the trading session here on Thursday in the early hours, and it does look like we are going to try to grind our way to the upside. The $3,500 level is an area that’s been significantly resistant. So, you do have to keep that in the back of your head as a potential target. If we can break above the $3,500 level on a daily close, I think that might be a sign that we are ready to get moving to the upside again. Keep in mind that we’re at the end of vacation season, so volume is going to be a little bit thin, but ultimately this is just a continuation of everything that we’ve seen in gold over the last two years or so anyway.

Every time this market pulls back, there are buyers willing to get involved and the ascending triangle that we have been in during the bulk of the summer has been fairly reliable. If we do pull back, the 50-day EMA has been like a trend line for this market for months, and I suspect it will be again. On a move above the $3,500 level, you would take the measured move of the ascending triangle and assume that we get about $300, so the target at that point would be $3,800 in the gold market.

If we were to break down below the 50 day EMA, it would mark a bit of a change in attitude, but there’s so much support below that I just don’t see how you can get short of gold. You’d be looking at $3,300 as pretty strong support, and then of course, $3,200, which was a major swing low previously. Furthermore, you have the 200 day EMA race toward that $3,200 level. So, I think we should take all that together. And this is a buy on the dips or buy the breakout market.

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