Gold Price Outlook – Gold Drops Early on Wednesday

Gold Technical Analysis

The gold market has pulled back just a touch during the early hours here on Wednesday as we continue to see a lot of noisy behavior. With that being said, I think there is still plenty of support underneath, and I will be watching that for a bounce that I can take advantage of.

The $4,400 level extends all the way down to $4,350 or so as significant support, and with that being the case, I think you have a situation where there should be plenty of buyers willing to get involved. After all, we have a strong uptrend and, of course, plenty of reasons to think that gold will continue to thrive.

We have central banks around the world purchasing gold to shore up balance sheets. Countries are in massive debt right now, gold will settle that, and of course, we have plenty of geopolitical issues. Beyond that, we also have central banks cutting, most specifically the Federal Reserve, so that tends to drive the value of gold higher as well.

Support and Fundamental Drivers

Based on the ascending triangle that we just broke out of, in theory, we could be going as high as $4,900, but I don’t think we get there overnight. This is a market that has expended a lot of energy, and therefore I think it makes quite a bit of sense that we chop back and forth with more of an upward tilt.

I think part of the reason we may be pulling back on Wednesday a bit is simply that we get the non-farm payroll announcement on Friday, and traders might be a little hesitant to start piling into risk-based positions.

So with that, I look at this as an opportunity. I will be particularly interested if we can get anywhere near $4,400, but honestly, even at $4,440, I could start to make the argument of perhaps dipping my toe into the water.

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