Gold Price Outlook – Gold Continues to See Range Play Out

Gold Technical Analysis

The gold market has rallied in the early hours of Wednesday ahead of the FOMC meeting, as traders await to see what the Federal Reserve will do. Now, there is a gap here on the chart, but I happen to know that’s just a bad tick. It’s actually just been a grind higher. So, with that being the case, I think you’ve got a situation where traders are continuing to trade in this inner consolidation area, trying to figure out what the Fed may do next. After all, this is what could be a pivotal meeting in the sense that they may or may not give us a “heads up” as to the plans of monetary policy in the month of September when people expect to see a rate cut.

They could very well shock the market during the session. And therefore, I think a lot of people are just batting the market back and forth. They don’t really know what to do with things. If gold does rally, then we’re looking at a move to the $3,500 level above, which is the top of the overall range. If it breaks down, we could be looking at a move to the $3,200 level below, which is the bottom of the range that we have been in for most of the summer.

The 50 day EMA is in the same neighborhood as well. And therefore, we need to respect that as a potential magnet for price. After all, traders do like these moving averages, the 50 day EMA and way below here, the 200 day EMA. So, it would not surprise me at all to see markets looking for those. On a breakout of the range, I would anticipate a $300 move based on the measured move of that, and I do actually believe that we are more likely than not going to see a break to the upside eventually. I don’t know if that happens right now, but it would just be a continuation of the previous trend, which consolidation does tend to bring.

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