Gold Price Outlook – Gold Continues to See Buyers on Dips

Gold Technical Analysis

Gold initially fell during the session on Friday, but then turned around to show signs of life again as we continued to see the upside play out in gold. Quite frankly, gold is one of the better performing markets over the last year and a half, so none of this should be a surprise. We are more likely than not going to enter a consolidation phase though, because quite frankly, the gold market has seen a lot of volatility, and most traders aren’t really looking to get involved in a market that can’t seem to make up its mind over the last couple of weeks.

But when you look at it through the prism of a longer term chart, you can see exactly what the problem is. We have gone pretty much vertically for the better part of two years. So therefore, it does make a certain amount of sense that gold might pause for a while. By pausing, it allows for digestion in some people to take profits while enticing others back into the market.

I see the $3,200 level as a major support level, which, of course, is backed up by the 50-day EMA. The 50-day EMA, of course, has been fairly reliable as dynamic support on the daily chart. To the upside, I see the $3,500 level as being a major barrier overcome, which is a large, round, psychologically significant figure and an area that, quite frankly, probably has a lot of options trading around it, so I do think it’s going to be difficult to break out above that level. In the meantime, I think we’re just going to bounce around in this $300 range.

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