Gold Price Forecast – Gold Continues to Work Off Froth

Gold Markets Technical Analysis

Gold markets have pulled back just a little bit in the early hours on Thursday as we continue to see a lot of back and forth choppiness. Ultimately, we are hanging around the $2,500 level and trying to sort out whether or not it is going to be supportive enough to turn the market around and allow it to go higher. I do think eventually we will go higher, but whether or not $2,500 holds remains to be seen. Even if it doesn’t, I won’t necessarily change my outlook on this market. I recognize that it is bullish, it should remain bullish, and probably will remain bullish.

If we can break out to a fresh new high, that opens up a move to the $2,550 level, but that might take some time. On a pullback, I think that there is plenty of support near the $2,480 level, and then again at the 50-day EMA, which sits just above the crucial $2,400 level where the uptrend line is hanging about.

All things being equal, there are plenty of reasons for gold to go higher. For example, the central banks, especially in Asia, are purchasing gold hand over fist. On the other hand, we also have to keep in mind that there are plenty of geopolitical risks out there that could lift gold. And then finally, lower interest rates could have a major impact on where we go next due to the fact that you don’t get paid as much with a bond, so people are willing to pay for storage of the metal. All things being equal, everything lines up for higher goals and prices, but we also have to work off some of the froth as well.

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