Gold Price Outlook – Gold Pulls Back to Support After US/China Announcement

Gold Technical Analysis

Gold markets gapped lower and then continued to fall early during the Monday session to reach towards the $3,200 level. That being said, the market is likely to continue to see the $3,200 level as potential support. And we have, in fact, bounced a bit from there. A lot of this, of course, will be based on the idea that the United States and China might be closer to a trade deal than everyone thought. And of course, the tariffs were cut drastically by both nations so that they could have some time to work things out.

That being said, I don’t know how much this changes. For the short term, most certainly it does, but longer term, there are plenty of reasons for gold to continue going higher. And that’s why I’m probably going to jump in here.

A gold trade at this point in time would have to anticipate a lot of choppiness to the upside, perhaps all the way to the $3,500 level. But I do think gold has a real shot at stabilizing in this region. Although we’ll have to watch and see, and if we do break down below the 50-day EMA, for example, then I think $3,000 becomes a very important level.

There are plenty of geopolitical tensions out there to keep gold elevated, as well as concerns about sovereign debt issues, central banks around the world cutting rates, and a whole plethora of other things. So, while gold did get walloped right away, the reality is when you look at the longer-term chart, if we bounce them here, it really didn’t mean much.

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