Gold Technical Analysis
Gold has gone back and forth in early trading on Wednesday, but as you can see, we still look pretty bullish overall. All things being equal, this is a market that has been very strong heading up to this area. A short-term pullback occurred, followed by another bounce and another pullback. But now it looks like gold is trying to break towards the highs again.
Key Levels to Watch
So that’s the question. Do we go back to the $4,400 level? If we can break above the $4,400 level, gold can really start to take off to the upside. A pullback from here could open up the possibility of a drop towards the $4,000 level, where I think the floor in the market is. But really, at this point, I think it would take a lot to make that happen.
So with that being said, I believe you have a situation where traders will continue to see this as a market that every time we drop, there will be traders out there willing to get involved. Keep in mind that central banks around the world continue to buy gold, right along with a lot of people who protect their wealth with the idea being that there’s so much volatility in other markets right now that perhaps gold will be the way going forward.
Regardless, this is a very bullish market, and unlike silver, it’s not overextended, so I think gold probably leads the way. I’m not looking for explosive moves, but I do recognize that there’s a Federal Reserve interest rate decision on Wednesday of next week, which will obviously have a major influence.
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