Gold (XAUUSD) Price Analysis – Gold Continues to Work Off Froth

Gold Technical Analysis

The gold market has rallied just a bit during the early hours on Wednesday as we continue to try to find some type of floor in this market. It’s interesting because, quite frankly, the gold market continues to find the $3,280 level as significant support. Breaking below that level then opens up the possibility of a drop down to the 50-day EMA, which is near the $3,200 level

Ultimately, I think at this point any dip will get bought into, but I also recognize that we could be in the midst of trying to form something along the lines of a bullish flag. On the upside, the $3,350 level is an area that I think if we can break above, then opens up the possibility of moving to the recent all-time high. I do think at this point, we are basically stuck between the $3,200 level at the bottom and the $3,500 level at the top. This is a market that has a lot of froth to work off. And I think that’s fine. Right now, we have a lot of questions about where the world is going. And that, of course, has a major influence on what happens with gold as a safety asset. And of course, a reaction to profligate spending by central banks.

You can see that we’ve been in a massive uptrend since somewhere in 2018, although we had a two year hiatus where we just kind of went sideways. Ultimately, this is a market that I do think eventually reaches the highs again, but we may have some time to spend here churning in order to build out the necessary inertia or to get some type of external catalyst to get things going.

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