Gold Forecast: Buyers Stepping in, Bullish Above $1880

• Gold markets have initially tried to rally during the trading session on Wednesday but gave back gains yet again as we continue to see the $1880 level offer resistance.
• We have seen 3 inverted hammers form in a row, that of course is a sign that we have a lot of noise just above.
• I think we got a situation where there is a lot of overhead downward pressure, and that will probably continue to be the case.

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Opportunity for Buyers Ahead

The 50-Day EMA sits just below current trading, and it looks as if the market will see that as potential support. The 50-Day EMA sits at roughly $1858, and that could offer an opportunity for buyers to step back in. If we break down below there, then we open up the possibility of a move to the 200-Day EMA. Ultimately, there is a lot of noise underneath, and I do think it’s only a matter of time before we see buyers try to come back into the market. That being said, I think it’s a market that will end up being noisy to say the least.

If we break above the top of the 3 candlesticks, that would be rather bullish, and that could send the market much higher as it would show a lot of bullish pressure at that point, and it would also show the market as picking up momentum. I imagine there would be a lot of “FOMO” at that point, and therefore the momentum could be quite brutal. In that scenario, I think we go looking toward the $1900 level initially, and then perhaps the $1950 level. Expect a lot of noisy behavior of the next couple of days as we had seen such a huge push lower that I would think a lot of people will be a bit concerned. Furthermore, you should probably keep in mind that those big red candles very rarely happen in a vacuum, so don’t be surprised if we continue to see a bit of a push back every time we try to rally. Ultimately, this is a market that I think continues to be very difficult to handle, therefore you need to keep your position size reasonable due to the fact that the volatility could cause quite a bit of damage to your account if you are overexposed.

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