Gold Price Outlook – Gold Drops Early on Tuesday

Gold Technical Analysis

The $4,200 level in the gold market looks like it is going to continue to offer support, and it is worth noting that we initially tried to rally a bit and then fall apart. All things being equal, this is a market that I think continues to see a lot of back-and-forth action, perhaps a little bit of sideways action. We’ll just have to wait and see. But this is a market that I think is hanging around $4,200 and $4,400. But if we break down below $4,200, then we could see a market drop down to the $4,000 level. Keep in mind that silver in the futures market has pierced the $50 level. So that could really start to see a knock-on effect. Gold, of course, is going to far better than silver because it is a safety asset, but sooner or later, this has to end.

We have to get a pullback to find value, and it’s possible we may be in the process of at least trying to start that. Whether or not that actually plays out, we’ll have to wait and see. Because, as you know, with an uptrend that’s been parabolic, sometimes you can just work it off via time and go sideways. That’s probably your best-case scenario at the moment. We are starting to print a barcode here, and that pattern typically just means lots of sloppy, choppy short-term moves. I do think, though, that the uptrend will remain for the foreseeable future, even if we were to drop two, three, or four hundred dollars. Ultimately, this is a market that I would not short. I do think that the buyers will overwhelm again, but we just need to take a bit of a breather.

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