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If we can break through the 2000$ level, then gold is going to take off rather viciously.
- Gold markets have fallen initially during the trading session on Tuesday but found a lot of strength later in the day to turn around and form a massive hammer.
- This is a market that cannot fall for any significant amount of time, and any time it does start to fall, there are plenty of people willing to jump in and pick up “cheap gold.”
Gold Technical Outlook
The $1880 level should be supported, but that will be the only place. The 50-Day EMA sits right around the $1850 level and is rising. After that, we have the $1800 level, which has shown the market to be supported as well. Ultimately, this is a market that I think you continue to look at dips as value, as a lot of traders are out there using gold as a way to protect wealth at the moment as central banks around the world seem to be hell-bent on fighting inflation, and therefore crushing the economy. Beyond that, the momentum itself should be something that’s taken into account, as we have been so massively bullish for so long.
The FOMC meeting over the next 2 days will have a major influence on where the US dollar goes, so that should have a major influence on how gold does. If the market gets a lot of hawkish behavior out of the Federal Reserve, we may see gold get hammered initially, but I think buyers will come back into the picture. On the other hand, if for some reason Jerome Powell seems somewhat dovish, that will turbocharge gold, and send it buyers flooding into it. That being said, I think we are going to go to the $2000 level eventually, but at this point it’s more or less going to be a situation where the market has seemingly already made up its mind and wants to go there.
Keep in mind that the $2000 level is an area that a lot of people will have to pay close attention to, mainly due to the fact that there will be a lot of psychology with every trigger, and of course it was the scene of a major top that we had put in in spring of 2022. If we can break through there, then gold is going to take off rather viciously.
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