EDITOR'S NOTE: Here we go with another gold market technical analysis. If you’re not much of a chartist, then watch the video before reading the article. It’s much easier to understand. Gold has been moving sideways since bouncing off its March 16 low of $1,895 an ounce. What the article doesn’t cover is that from that point on, gold has been exhibiting a very rare “diamond bottom.” Diamond bottoms have a historical favorability rate of 73% of reaching their upper target. The upper target is $2,000 an ounce. Nevertheless, historical consistency in any market pattern is never a sure shot; there’s never a guarantee that it might repeat itself at any time. Correlation is not causality. But there are a few other technical factors at play that cast favorability on the side of the bulls. And those are what the author discusses in detail in the presentation below.
Gold markets have gone back and forth during the trading session on Wednesday as we continue to undulate in the same tight range.
Gold Market Technical Analysis
Gold markets have gone back and forth during the trading session on Wednesday as we have formed a somewhat neutral candlestick in that same area that we have been trading over the last couple of weeks. It is worth noting that the sellers are getting a little bit more aggressive, but we also have a significant amount of support underneath. The $1900 level underneath is a significant support level, and therefore it is worth noting that we remain above there. The 50 Day EMA currently sits at the $1910 level and is rising, causing a bit of a “squeeze” in this market.
If we can take out the $1950 level, then it is likely that we could go looking towards the $1970 level. After that, then the market is free to go looking to the $2000 level next. We are still very much in an uptrend, but it is worth noting that we have struggled to break out, and now it looks as if we are trying to figure out what the next catalyst is going to be. If interest rates continue to spike the way they have, that will work against gold, but one would have to think that the 10-year note has been oversold, so given enough time it is likely the gold may be able to work past that concern.
Furthermore, we also have the geopolitical risks going on at the moment that will continue to make gold somewhat attractive, but with central banks around the world tightening monetary policy, this might actually work against gold and the long term. At this point, I have a couple of levels that I am watching in order to place my next trade. Right now, we are seeing and exercising Brownian motion.
Gold Price Predictions Video 07.04.22
Source: FX Empire
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Originally published on FX Empire.