Gold markets initially pulled back during the week but then rallied enough to break above the hammer from the previous week. The shooting star from a couple of weeks ago shows signs of weakness as well, and therefore I think that it’s only a matter of time before the market make some type of longer-term decision. If and when it does, then I more than willing to place a trade but I am the first person to admit that it’s more likely that we go higher than lower.
Gold Analysis Video 27.01.20
If we do turn around a break down below the hammer from the previous week, it’s very likely that the market goes down to the $1525 level, followed by the $1500 level. The market has been rather impulsive for some time, so it’s not a huge surprise to imagine that we need to either go sideways and kill time or pull back to build up momentum. The market has seen resistance in this general vicinity before, so it’s not a huge surprise to see that we stalled in this general vicinity.
I believe at this point, gold is reacting to several different moving pieces, not the least of which would be concerns about global growth, although getting a little bit more stable, is very weak. The most important factor of course is that central banks around the world continue to loosen monetary policy and of course keep rates extraordinarily low. That tends to favor gold in general, and I do believe that continues to be the case going forward.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
More From FXEMPIRE:
- GBP/JPY Price Forecast – British Pound Gives Back Some Gains
- Silver Weekly Price Forecast – Silver Markets Show Resiliency
- Gold Price Prediction – Prices Push Higher as Market Focuses on Coronovirus
- Gold Price Forecast – Gold Markets Rally Again
- Gold Price Forecast – The Next Leg Higher is About to Begin, Watch Silver
- US Stock Market Overview – Stocks Slide as Feat of Coronovirus Epidemic Spreads