Gold Price Outlook – Gold Continues to See Noisy Trading

Gold Technical Analysis

The gold market has rallied ever so slightly during the trading session here on Wednesday as we wait to determine which direction we’re going to finally go. After all, we are basically in the middle of a larger consolidation range that sees the $3,500 level above as a major ceiling and the $3,200 level below as a major floor. It’s probably worth noting that we are hanging around the 50 day EMA as well, which of course has a major influence also. And therefore, as we are basically at what I would consider to be fair value, there isn’t a whole lot to do here unless, of course, you are trading very short-term charts. I suspect that at this moment, we have gold, which looks like a market that is probably working off a lot of excess froth because we did shoot straight up in the air for a couple of years to get here.

Now, we are simply trying to sort out whether or not there is any momentum that will enter this market. I think this time of year might be coming into play as well, mainly due to the fact that the summer is typically pretty quiet when it comes to trading volume. A lot of traders are away on holiday during the month of July or August as well. So, we may have a couple more months of this sideways grind.

Once we get into fall, you’ll see more volume flow into the markets, and you might get a bit more clarity. As things stand right now, I prefer to buy dips that get anywhere near the $3,200 level, assuming that even happens. If we were to break above the $3,500 level, then it opens up a move to $3,800. Below $3,200, then you have a real shot at testing the 200-day EMA, which is just above the psychologically important $3,000 level.

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