Gold Price Outlook – Gold Continues to Search for the Floor

Gold Markets Technical Analysis

The gold market has rallied just a touch in the early hours of Tuesday as we continue to see a lot of noisy behavior. All things being equal, this is a market that I think will continue to look for buyers. And the question now is whether or not the forced liquidation is over. After all, we have seen a lot of big traders out there getting their positions liquidated to cover margin in other markets. It isn’t so much that gold is something that people don’t want to own. It’s that they are being forced to sell it to cover other mistakes.

The 50 day EMA does look as if it is trying to offer a bit of support here. And the $3,000 level, of course, will attract a certain amount of attention by itself. Ultimately, I like this as a market that you can buy the dips in, but you have to be very cautious with your position sizing. You don’t want to get aggressive in a market like this, at least not until other assets start to stabilize. In other words, you don’t want to be caught in a situation where you get into serious trouble because other traders are forced to sell.

The bullish flag that had formed previously does suggest that we could be looking at a move all the way up to the $3,300 level, and there’s really nothing on this chart that tells me we can’t get there. It’s just that it’s not going to be overnight. $3,000, of course, is an area that will continue to attract a certain amount of attention, so with that being the case, I think you will probably start to see buyers come in and try to pick up a bit of value.

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