Gold Price Outlook – Gold Sits at the 50 Day EMA on Tuesday

Gold Technical Analysis

Gold is sitting just above the crucial 50-day EMA, which of course is an indicator that a lot of people will be paying close attention to. It has basically acted as a trend line all year and with that being the case, I think it makes sense that we continue to react to it. If we can break above the top of the inverted candlestick from the Monday session, then it opens up the possibility of a move to the $3,500 level.

If we were to break down below the 50 day EMA, then the market could open up the possibility of a drop to the $3,300 level. If we break down below there, then it’s likely that we will drop to the $3,200 level, which is an area that has been pretty important support previously. If we were to break down below there, then we have to reevaluate the whole thing.

But with the whole thing, basically moving on central bank buying, central bank cutting of rates, and of course, a lot of uncertainty, then I think you have a situation where gold will eventually go higher, but this time of year does tend to be somewhat quiet, and volume does tend to drop and in fact has been dropping since the middle of May overall. So, with this, I think we just essentially drift higher, not necessarily explode higher, but eventually I expect to see the market break above the $3,500 level.

Then we could go looking to the $3,800 level based on the $300 worth of range and the measured move from breaking out of it. You could even make an argument that we are in an ascending triangle, which also sends this market looking to the $3,800 level. I don’t expect to see it tomorrow, but I do think it happens given enough time.

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