Gold markets have been trying to build a bit of a base over the last several weeks, and now we have cleared the $1800 level. After forming the hammer from the previous week, breaking above the top of it is technically a signal to start buying. That being said, I do not think that it is going to be easy to go higher, and I recognize that there is a lot of noise above, especially near the $1870 area, where the gap on the daily chart sits. If we can break above there, then $1900 would be the next target.
Gold Price Predictions Video 12.07.21
That of course would open up the possibility of going back towards the highs, but right now we look like we are probably more likely than not to continue chopping around. This is because we have a lot of headwinds out there when it comes to the gold market, not the least of which the possibility that money is flowing into the bond market instead of gold for the traditional “safety trade.” Furthermore, if the US dollar continues to strengthen, that could also cause major issues.
With that in mind, I believe that the market will eventually go looking to either break out to the upside, or perhaps try to pierce the $1750 level, an area that has been important more than once. If that does happen, it would be an extraordinarily negative sign for the gold market, opening up a move down to the double bottom at the $1680 level. Anything below that would absolutely kill any hope of an uptrend and this market, and send gold spiraling much lower.
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This article was originally posted on FX Empire
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