Gold Forecast: Gold Takes a Hit to Kick Off the Week

Gold Markets tried to break above the 200-Day EMA during the trading session on Monday, but as you can see we have pulled back significantly from the 200-Day EMA, which is near the $1760 level. At this point, it’s possible that we could see a return to the 50-Day EMA, especially as this week features a lot of indicators that the Federal Reserve will pay attention to.

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Fundamental Factors Affecting Gold Price this Week

• The first one of course is going to be the Core PCE, as the Federal Reserve likes the idea of following that inflation indicator, in order to make decisions when it comes to interest rates.
• Furthermore, we also have the jobs number coming out on Friday, and therefore a lot of people will be paying close attention to it.
• If the market were to break down from here, the 50-Day EMA comes into the picture right around the $1715 level.
• As long as we are between these 2 indicators, it’s likely that we will have a significant move in one direction or the other, but it is worth noting that gold has formed a massive “W pattern”, and now it looks like we are trying to test the top of that area again.

Alternatively, we could turn around and breakout above the top of the candlestick, then it’s likely that we could go looking to the $1780 level. After that, then you have the $1800 level. The $1800 level is a large, round, psychologically significant figure, and an area where we have seen a lot of noise at previously. If we were to break above there, then it’s likely that we could go looking to the $2000 level. I do think we could get there if the US dollar continues to struggle, or if people continue to drive interest rates down in the United States via the bond market.

The previous trendline of course is an area where we could see some buyers, but at this point we need to wait to see whether or not that actually plays out. By the end of the week, we should have some type of indicator that could give us an idea as to where we are going next, and I think the next couple of days are going to be very noisy, so therefore you need to be very nimble and keep your position size small.

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