Gold Price Outlook – Gold Continues to Respect The Range

Gold Markets Technical Analysis

Gold markets have pulled back a bit in the early hours on Monday, dropping about three quarters of a percent as traders continue to keep an eye on interest rates and quite frankly, I think this situation has more to do with the fact that we are somewhat range bound, and we just hit the top. If we can break above the $2,720 level, then I think gold is likely to go much higher. But as things stand right now, I think we still have to work on our inertia because quite frankly, the market had gone up so much in the previous year that it does make a certain amount of sense that we have to digest these gains.

If we were to break down below the $2,600 level, it opens up the possibility of a move down to the $2,550 level, followed by the $2,500 level, which is backed up by the 200-day EMA. Regardless, this is a market that I don’t really want to short, although I do think it probably drifts lower again. I prefer to buy dips in gold because there are plenty of reasons to think that it could go higher over the longer term.

But right now, I think we’re a little skittish because of the way bonds are behaving around the world. If the market were to break out above that $2,720 level, I suspect that we’ll go looking to the $2,790 level and then eventually break 2,800. That is my base case scenario, but I also suspect that we have some time before we get enough confidence and inertia to push gold higher.

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