Daily Gold Forecast - 31 January 2019

Gold

Gold markets rallied significantly during the trading session on Wednesday, as the Federal Reserve finally had is press conference. Now that it looks likely to remain soft for the foreseeable future, the US dollar has gotten beaten up. At this point, it looks as if Gold has gotten a little bit extended so I would not be surprised at all to see a bit of a pullback to offer value. The 20 day EMA, pictured in green on this chart, should offer a bit of dynamic support and I also think that the $1300 level now is essentially the short-term “floor” in the market. Longer-term, I still believe that there are plenty of traders out there that have missed this trade.

Now that we have gotten stretch, simply look for pullbacks offer value that can be bought as the gold market has certainly seen a nice healthy run, and now that the $1300 level is in the rearview mirror, it should signify that the next leg higher is about to happen. At this point, we are looking to go to the $1400 level, probably in $25 increments as it seems to be how the market is measured. I believe that the 50 day EMA is also supportive underneath the 20 day EMA but would be surprised if we reached down to that level.

While I am bullish of gold, I suspect that we desperately need to pullback in order to find buyers, and we will be waiting to pick up a bit of value. In fact, it may even be early next week before we get that opportunity, but I also recognize that if we break above the top of the candle stick for the trading session on Wednesday, then the market will probably make its move towards $1350 next.

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.