Gold Price Outlook – Gold Continues to See Buying Pressures

Gold Technical Analysis

The gold market has rallied a bit during the early hours on Wednesday as it looks like we are going to continue to see buying pressure, but I think short-term pullbacks are likely, especially as we are getting pretty stretched here. Ultimately, this is a market where the prudent trader cannot short because it’s just so strong. But I also recognize that we have a scenario where the overbought conditions could have people coming in to close out their positions, take a little bit of profit, and then perhaps buy on the dip going forward.

I would prefer to buy gold on the dip. Quite frankly, I don’t like chasing a market that is this overbought. In fact, the RSI Relative Strength Index on the monthly chart is at something like 91, the highest it’s, I believe, ever been. So that is something worth paying attention to. If we get a bit of a drop here, I’d be interested in buying down at the $4,000 level if I get that opportunity. However, I recognize that we may not get that drop.

That’s just the reality of a runaway market. One of the hardest things to do is jump into a market that is just running to the upside. You do not want to be the person who buys at the last minute. Regardless, it’s clear that you cannot short gold. It’s all but impossible to do at the moment, and volume is fairly strong. So that suggests that to be true at the moment.

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