Gold Forecast: Looking to Break from Triangle

Christopher Lewis

Gold markets have rallied a bit during the trading session on Tuesday but did not hang on to all of the gains. The market is currently looking at the $1700 level with interest, and it should be noted that we have a couple of trendlines that define a nice symmetrical triangle. Looking at the candlestick for the day, it shows a lackluster bullish session, but the overall picture of the market is bullish in general. Because of the lack of directionality during the day, it makes sense that we will probably continue to see a bit of volatility. However, there are a lot of different reasons like gold at this point.

The first thing that you can think of is the fact that the 50 day EMA sits just below the triangle. That of course is a very bullish sign and something that a lot of longer-term traders will pay attention to. It does seem to work quite well in the gold futures market, which of course influences everything else. The market breaking above the top of the symmetric triangle is what I expect, mainly because of the uptrend that we have been in. Furthermore though, there are plenty of fundamental reasons to think that the gold market should continue to rally from this point.

Advertisement
Afraid of market volatility? Gold is a great safe haven asset

  Trade Gold Now!

The central banks around the world continue to loosen monetary policy and that of course will be good for gold longer term. In fact, that is part of what has been driving gold market higher due to the fact that there is a lot of central bank printing which of course drives up inflation longer term. Furthermore though, and perhaps more pertinent to the situation we find ourselves in, the market has to deal with a lot of uncertainty around the world and that of course will drive up the “safety trade” that gold offers. The one thing that is working against gold in general though is going to be the US dollar strengthening over the longer term. At this point, it is a bit of a “push pull” trade but one thing is certain at this point, shorting gold is not going to be much of a trade anytime soon. In fact, I would need to see the market break down below the $1600 level to even consider that. That does not look likely at this point, so I remain bullish overall.

Gold

About the Author
Christopher Lewis

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.

Currency Pairs:
Comments

Did you have a good experience with this broker? A bad one? Tell our team and traders worldwide about your experience in our User Reviews tab. Your email address will not be posted.

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments
Add Comment

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.