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Gold Forecast: Quiet on Monday

  • Gold looks like it is trying to build some type of base for a move higher.
  • At this point in time, it’s also worth noting that the 50-Day EMA is in this general vicinity, therefore I think you’ve got a scenario where buyers probably jump in and try to support the crucial $2300 level.

Gold Forecast Today - 02/07: Quiet on Monday (Chart)

Consolidation Remains

Consolidation remains to be the situation in the gold market, as gold is simply determining where it’s going to go next. That being said, there’s a certain amount of seasonality when it comes to this market, due to the fact that summer is very quiet, especially as liquidity starts to drop. If we can break above the $2350 level, then the market may take off to the upside, perhaps reaching the $2400 level over the longer term.

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    That being said, we have the $2300 level underneath our current trading environment which is crucial. This is an area that I think has a lot of support right around it, and I think extends down to the $2280 level. If we were to break down below that level, then you could see a much deeper correction but until we see that, the market is likely to continue to see more upward pressure than down.

    I do think that you need to keep an eye on the interest rates in the United States, because that will more likely than not be the biggest driver of where gold goes next. That being said, the market is likely to continue to see a negative correlation between higher rates in the United States in gold, and of course vice versa. However, there are other things that you need to keep an eye on, not the least of which would be the geopolitical issues.

    As long as there is war in Ukraine, the Middle East, political instability in Bolivia, Kenya, and various other countries, it makes a certain amount of sense that gold will at least be somewhat attractive to big money. I remain a buyer of dips in this market going forward.

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    Christopher Lewis
    About 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.

     

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