Gold (XAUUSD) Price Analysis: Gold Drops to Support Level on Tuesday

Gold Technical Analysis

Gold markets have plunged in early trading on Tuesday as traders come back to work from the Memorial Day holiday in the United States. That being said, it is right around the $3,300 level, an area that has offered a bit of support, so we’ll have to wait and see whether or not that holds. If it does, then gold probably bounces from here heading back towards the $3,360 level. If it does not, then I’d be particularly interested in how gold behaves near the $3,200 level. The $3,200 level, of course, is where we see the 50-day EMA currently hanging about. And therefore, I would anticipate that a lot of technical traders will be interested in perhaps trying to pick up gold at that point.

Whether or not that actually plays out, well, we’ll have to see, but I think it makes perfect sense as we have seen more of a slow chop lower, almost like we’re building a bullish flag, but maybe not quite, it is a little big. Nonetheless, this is a market that’s been positive in its trend for quite some time, and I just don’t see an argument for trying to get too cute here. I think you’re looking for value and you’re looking to take advantage of it if and when it appears.

If we were to break down below $3,200, then maybe we reset towards the $3,000 level, but there are plenty of reasons to think that gold goes higher. There are geopolitical concerns. There are central banks around the world buying gold hand over fist. And of course, there are a lot of questions about massive spending bills coming out of most major economies. So, with that being said, I am a buyer of gold, but I recognize it’s going to be very noisy in the range that we are currently sitting in.

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