Daily Gold Forecast - 21 January 2019
Gold markets fell hard during the Friday session, crashing into the $1280 level, an area that I believe is significant support. This bearish candle is a bit concerning for people who are buyers, but I also believe that underneath there is a lot of support. Gold markets continue to move based upon the US dollar, which had a strong day on Friday. That being the case, you should pay attention to the EUR/USD pair, and he gave back some of the gains, so of course Gold fell. Ultimately, I think that we will see buyers reenter the market, as we are now testing the top of the previous uptrend channel, and the 20 day EMA which has been fairly reliable.
Looking at the Gold chart, it makes sense that we have pulled back from the $1300 level, and the pullback may simply be an opportunity to pick up value. If we get that opportunity, then it’s very likely that we could see a bit of a pullback first. The 50 day EMA pictured in red on the chart below is massive support as well, so I think given enough time we should see buyers come back between here and there. I don’t have any interest in shorting Gold because I think that the Federal Reserve is going to continue to remain somewhat soft and neutral, and that will be negative for the dollar longer-term. Overall, I do believe that eventually we will see the market break that $1300 level, and once we do I think we could continue to go much higher, perhaps reaching towards the $1325 level on the way to the $1400 level. Expect a lot of choppiness, and the fact that we are closing at the bottom of the range isn’t exactly a great sign. But having said that, I think that the longer-term uptrend is still there.
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