Gold Price Outlook – Is Gold Looking to Break Out Again?

Gold Technical Analysis

The gold market has rallied quite significantly during the early hours here on Friday, as it looks like we are, in fact, going to break to the upside, maybe even take out the $4,400 level before it is all said and done. This would obviously be a sign that the next impulsive leg higher is kicking off. At this point, short-term pullbacks open up the possibility of buying value, and that is how this market has to be approached.

The $4,200 level underneath is believed to be a floor in the market. Even if there were to be a breakdown below there, the 50-day EMA and the uptrend line are both seen as offering support as well. With central banks buying gold hand over fist, there is no reason to think that anything has changed.

Silver Correlation and Ongoing Strength

Silver has broken widely to the upside, and it looks like gold is now trying to play catch-up, which makes sense. Gold is a market that tends to move in the same overall direction as silver, and vice versa. As long as silver is strong, gold is likely to remain strong, and the opposite can be true as well, with gold strength dragging silver higher at times.

Nonetheless, the one thing that is not visible on this chart is any scenario in which being a seller of the gold market makes sense at this point, unless the goal is simply to close out a position and take profit. In this kind of environment, the direction is clear, but the timing is all about trying to find “cheap gold” more than anything else.

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