Gold Price Outlook – Gold Markets Bounce in Early Monday Trading

Gold Markets Technical Analysis

Gold rallied rather significantly in the early hours on Monday gaining about 1.35% as New York wakes up. Ultimately, the one thing that you need to keep in mind is that we have sold off viciously, so a little bit of a relief rally probably makes some sense. We didn’t quite reach down to the $2,500 level, we came within about $40 of it, and now it looks like buyers are willing to step in and pick up cheap gold. Keep in mind that there are plenty of reasons for gold to go higher, not the least of which would be the fact that central banks out there are buying it, so there is a bit of a floor in the market regardless.

But we also have to keep in mind that there are plenty of geopolitical tensions, although they may be defusing just a little bit with the Trump administration coming in. However, over the weekend, President Biden and Stammer from the UK gave the green light for the Ukrainians to start using long range NATO missiles into the heart of Russia, which Vladimir Putin promptly responded to the threat of using nuclear missiles. So, we’ll see.

Really at this point in time though, we also have to just look at the fact that we’re in an uptrend. And while this was a fairly significant pullback, the reality is that when you measure the move from the bottom, in October, we didn’t even get to the 38.2% Fibonacci retracement level. So really, although rapid wasn’t like an extremely deep correction. So, at this point in time, it looks like we are ready to continue higher.

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