Gold Forecast: Pullback to Take Breather After Move Higher

Christopher Lewis

When you see a stronger US dollar, quite often you will see the gold market take a bit of a hit.

Gold markets fell a bit on Friday to reach down towards the $1831 level. This is essentially where we had seen the market break out from previously, and it is not a huge surprise to see that this market has pulled back. If we can find buyers here, that would confirm the breakout as being “retested.” This is common in technical analysis, so it does make sense that we would see traders trying to pick up a bit of value here.

If we do break down below the $1830 level, it could signify that it was a false breakout, which would be very possible due to the fact that we have seen a lot of false breakouts as of late. This would also signify that perhaps the US dollar is going to continue to strengthen in general, which would jump into this market as well. After all, when you see a stronger US dollar, quite often you will see the gold market take a bit of a hit.

On the other hand, if we turn around and recover a bit, then it is likely that we could go higher, reaching towards the top of the candlestick from the Thursday session at the $1847 level. Breaking above that level could then open up the possibility of a move towards the $1875 level. That would probably coincide with more panic because gold has been bought in a bit of a panic trap as of late. If we were to turn around and break down below the $1825 level, then I would anticipate that the market could go down to the $1800 level underneath. The 50 day EMA is at the $1807 level and curling higher, so it is possible that we could see that offer support as well.

If we were to break through all of that, then it is possible that we could go looking towards the $1775 level, which is where we had bounced from to begin with. I do not necessarily know that is going to happen, but it is possible that we will see that move if we suddenly get a huge move higher in the US dollar or if perhaps interest rates in America start to spike again.

Gold

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.

Did you like what you read? Let us know what you think!

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

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.