Gold Weekly Price Outlook – Gold Has Recovered for the Week to Rise Above 4K

Gold Markets Weekly Technical Analysis

The gold market fell rather significantly during the trading week, breaking below the $4,000 level. However, it has since turned around to show some signs of life again. With that being the case, the market still appears hesitant to truly turn things around. The key question now is whether we can build up enough momentum to get moving higher again.

The market had been exponentially bullish for quite some time until the last week and a half, when gravity inevitably set in. If we break down below the bottom of this week’s candlestick—which formed a bit of a hammer—it would be an extraordinarily negative development, possibly opening the door for a move back toward $3,500, where an ascending triangle previously formed during the move to the upside.

The $4,200 level should still be viewed as a short-term ceiling. A break above that could send prices much higher, but for now, the market seems to be trying to determine whether the upside remains on the right side. We could easily go sideways for a while to work off some of the excess froth. Central bank buying provides underlying support, but widespread acceptance of $4,000 as fair value will be necessary before traders can get aggressively bullish again.

For those holding a bullish bias, a period of sideways movement would actually be healthy. If we break down below that weekly hammer, a deeper pullback is likely—but even then, a drop below $3,500 seems unlikely. Overall, it’s becoming increasingly difficult to maintain the kind of momentum we’ve seen recently.

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