Gold Weekly Price Analysis – Gold Drops for the Week Again

Gold Technical Analysis

The gold market gapped lower to kick off the trading week, bounced a bit to fill the gap, and then fell again to test the $4,000 level. We are looking at this as a market right now, where testing the $4,000 level is at a point of inflection. Quite frankly, if we were to break down from here could send this market towards the $3,500 level, but we’ll just have to wait and see how that plays out.

If we bounce from here, then we could go all the way back toward the $4,200 level pretty quickly. We are still technically in an uptrend, but it looks like we’re trying to form some type of topping pattern. I do think $4,000 is important. Giving that up gives up quite a bit of support. If we bounce from here, then we could go as high as $4,600 and still just remain in consolidation.

Weekly Technical Outlook and Key Inflection Points

Gold is starting to see a little bit of a turnaround on Friday. We’ll see if that plays out as any type of momentum, but as things stand right now, it seems like most traders are worried about owning dollars, not owning gold. Because of this and the fact that people believe that the Federal Reserve may raise rates a couple of times, it is hurting gold, but longer term, I still believe gold goes higher. Rates are dropping anyway, so we’ll see how that plays out.

So, you have a little bit of a push and pull situation in the bond market; it is bleeding over into the gold market. This pullback, when looked at through the prism of the last 2.5 years or so since we started the uptrend, is reasonable, so we’ll have to see how that plays out. I think buyers are still very interested.

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