Gold Forecast: Markets Slam into the Top of the Channel

• Gold markets have rallied rather significantly during the Friday session after the job summer came out in the United States.
• The gold markets have reacted quite drastically to the idea of wage inflation in the United States dropping, and therefore it’s likely that we would see a lot of people looking for the Federal Reserve to slow things down as far as tightening is concerned.
• It’s very unlikely that the Federal Reserve is going to change its attitude, so I would not read too much into this.

Advertisement

Ready to start trading gold?
We've got you covered!

Get started!

The market is likely to see the gold market rally to show signs of strength again, but we are also getting a little bit overstretched. We are at the top of the channel that we have been in a while, and therefore I think we’ve got some work to do to break out to the upside, especially considering that the $1875 level has been important in the past. If we can break above that level, then I think it opens the possibility of a move to the $2000 level. The $2000 level is a large, round, psychologically significant figure, and an area that a lot of people will be paying close attention to.

Patience will be Needed

On the downside, the $1800 level is likely to be the “lower the market, assuming that we can even break down below the uptrend line. The 50-Day EMA has broken above the 200-Day EMA to form a bit of the old “golden cross”, which is a longer-term “buy-and-hold” signal that a lot of people pay attention to. Nonetheless, I think now pullbacks are coming, and therefore I think being a buying opportunity makes quite a bit of sense on the steps. This pullback should be thought of as value, and I do think that we get an opportunity to pick up cheap gold.

If we get a daily close above the $1875 level, then I would just go ahead and start buying there. I don’t presently own any gold, but I’m desperately looking for some type of value to take advantage of. Right now, I just don’t want to chase the trade until we clear the next barrier. In the meantime, a lot of patience will be needed.

Ready to trade today’s Gold forecast? Here are the best Gold brokers to choose from.