Gold Price Outlook – Gold Gaps Higher Only to Fail

Gold Technical Analysis

Gold markets gapped to the upside to kick off the trading week on Monday, but as you can see, haven’t been able to hang on to that momentum. All things being equal, this is a market that I think is paying quite a bit of attention to the $3,500 level. The $3,500 level is a large, round, psychologically significant figure that a lot of people will be paying attention to just from the psychology end of it, but also the fact that back in late April, we had seen gold peak at this range.

That being said, we are doing everything we can to try to break out to the upside, and it looks like it is going to be difficult to overcome. But if and when we finally break that $3,500 level, gold will probably fly from here towards the $3,800 level based on the measured move of the consolidation of the last few months. If we continue to pull back, I think the $3,300 level will be a massive support level followed by the 50-day EMA.

Gold markets, of course, are reacting to several different things at the same time, not the least of which is the potential Federal Reserve loosening a monetary policy later this year, but of course we also have geopolitical concerns out there, with Iran and Israel now fighting. So, we have to look at this as a potential safety play, but I think the easiest way to look at this chart is just to recognize that we have been going from the lower left to the upper right for a few years now.

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