- The gold market has gone back and forth on Thursday, as we continue to see the precious metals markets capture the imagination of traders globally.
The gold market has gone back and forth during the trading session on Thursday as we have seen a lot of volatility. We initially tried to reach the $5,600 level and it looks to me like somebody somewhere blew up possibly or some other type of action, maybe mass profit taking because we have seen the market turn around and plunge since then, only to bounce just a bit.
This is a candlestick that I think will scare a lot of traders unless it ends up rallying into the end of the session here so that it can show a hammer. A market dropping from here is the possibility of going down to the $5,000 level. The $5,000 level is a large round psychologically significant figure and an area that I think there would be a lot of options traders at.
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That being said, I think gold is still positive, but it desperately needs some type of pullback and the same thing with silver. Ultimately, this is a market that will eventually discover gravity and once it does, unfortunately a lot of retail traders are going to get absolutely crushed because they will be overleveraged.
This is going to be the market that I guarantee you we will hear stories of people who made $100,000 on the way up and ended up losing $103,000 on the way down. That being said, I do think longer term it is very possible that we go much higher and I do think that we are in a bit of a longer term super cycle, but that doesn't mean we can't pull back to the 50-day EMA all the way down at the $4,500 region, which with leverage will wipe out most traders. So, look for a drop and then a bounce. We have seen that to a point here during the session, but if the market starts to fall and break down again, you have to get out. You can't just hang on to it for dear life.
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