- Gold has been somewhat positive during the trading session, gapping higher to kick off the Tuesday trade, breaking above the 3000 level in the front contract.
- And now it looks like we are trying to rally, but that doesn't necessarily mean that it is going to be the easiest move higher from here.
After all, there are a lot of concerns out there and recently we've seen a lot of damage done to the gold market, mainly due to the fact that there were forced liquidations. For example, most hedge funds are levered to ridiculous amounts against multiple assets, and they had made a ton of money in the gold market. So, if you find yourself in a situation where everything else is falling apart, you have massive gains in the gold market. It makes a lot of sense that you would be adding to your pile of money by selling your gold positions. Some may even have been forced to sell their winners in order to cover margins in other markets.
Is the Selling Over?
So, the question now is, will we see gold continue to go higher? I do believe that the answer is yes, but I also recognize that it could be a very noisy path to reach the projected target based on the previous bullish flag that we had formed. The $3,300 level is the target, but that doesn't mean we have to get there overnight. Keep in mind that the smartest thing you can do in a time like this is keep your position size reasonable.
Top Regulated Brokers
The 50 day EMA does seem to be acting as a bit of a floor as well. So, all things combined, this could be a scenario where value hunters are finally showing up. It is worth noting the volume was fairly strong during the day. So that helps the situation as well. And if you are patient enough, you should get plenty of opportunity to build a position for the next leg hire, which I still believe will be another $300 from here.
Ready to trade our Gold price forecast? We’ve made a list of the best Gold trading platforms worth trading with.