Gold Price Outlook – Gold Might Need a Pullback

Gold Technical Analysis

The gold market has gone back and forth during the trading session here on Friday, as the market is hanging around just below the $3,900 level. The $3,900 level of course is a large, round, psychologically significant figure and an area that’s offered quite a bit of resistance over the previous candlesticks. A short-term pullback is certainly very possible and really at this point in time, a pullback could open up the possibility of a move down to the $3,800 level.

With this being the case, I think you’d have to be very interested in this $3,800 level, not only due to the way it behaved previously, but the fact that the ascending triangle that we broke out of to get to these levels suggested a move to $3,800. And therefore, it makes a certain amount of sense that we are looking at that as a potential area of support after it was such a prominent target.

This being said, market participants continue to look at this through the prism of massive central bank buying providing a little bit of a permanent bid for the market, but we also have interest rates being cut by the Federal Reserve and that drives gold higher. And then quite frankly, we have a lot of uncertainty out there. The uncertainty out there has people buying gold just for safety. So, with all that being said and the simple momentum, I like buying dips. I would love to see a dip, especially down to at least the $3,800 level. Longer term, I do think we will eventually find our way to $4,000.

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