Gold markets have rallied during the course of the weekend as you can see the market has seen a lot of noisy behavior. That being said, this is a market that is trying to figure out where to go next, and quite frankly I think what we have here is a situation where we are simply spinning our wheels and try to figure out where to go next. If we can break above the $1835 level, then I think the market really starts to take off and it goes looking towards the $1875 level. Alternately, if we break down below the $1780 level, that would be extraordinarily negative for gold.
Gold Price Predictions Video 17.01.22
Either way, it looks as if we are simply going sideways in the short term, so I think that it this is a short-term trader type of environment at this point. However, if we break out of this box that I have drawn on the chart, it is a longer-term trading opportunity. If we break down, I could see a $50 drop right away, perhaps followed by a move down to the $1700 level. All things been equal, this is a market that seems as if it is just killing time, just as it has been doing for the last several months. In fact, you could even say that the volatility is shrinking, which if you are a trader of something like the Bollinger Band indicator, you probably see quite a bit of compression, which suggests that we will eventually take off, but right now we just do not seem to be that interested.
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This article was originally posted on FX Empire