Gold Forecast: Difficult Path to get to $1950 Level, Hesitant Over Moves

• Gold markets have fallen a bit during the trading session on Monday, as we continue to see the 50-Day EMA come into the picture and offers certain amount of interest.
• The 50-Day EMA is a very commonly followed indicator, so you need to look at it through that prism.
• Given enough time, I think you get a situation where the market will probably have to make a longer-term decision but it’s deftly worth noting that recently we had a massive shot across the bow.

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Selling Pressure Ahead

Gold sold off quite rapidly a couple of weeks ago, and all last week continued to find plenty of sellers every time it rallied. It is because of this that I think we still have a bit of selling pressure out there, and it’s going to be difficult to get overly bullish on this market. The size of the candlestick is not necessarily huge, but it does suggest that there might be a little bit of follow-through, especially as we have broken through the bottom of a neutral candlestick to fall from there.

If we do fall, then I think you probably see the gold market go looking toward the 200-Day EMA, which is closer to the $1800 level. The $1800 level is an area that obviously is a large, round, psychologically significant figure, and of course will attract a certain amount of interest. Because of this, I think we’ve got a situation where we will have to deal with the overall volatility of the market which of course continues to be very large.

If we turn around and take out the Thursday candlestick to the upside, then I think it’s likely that we could see the gold market go looking to the $1950 level, an area where we had seen selling pressure previously. That would be very difficult to get to, but if we sell the US dollar suddenly sell off, then it would make a certain amount of sense. Nonetheless, I am a bit hesitant to get overly excited about any move to the upside, at least in the short term. We would need to see all markets light up together, in probably more or less a “anti-US dollar stance.” The market will continue to be noisy regardless, so be cautious about your position size.

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