Gold Forecast: Fed Week Volatility

• The gold market has fallen during the trading session on Monday, as we continue to see a lot of noisy overall behavior.
• That being said, I do think there is a certain amount of support in the same general region we find ourselves in, as we had previously had a significant “inner consolidation area” right around the 50 Day EMA.
• From a long-term perspective, the gold market still sees a lot of support near the $3200 level, as well as massive resistance at the $3500 level.
• As we are roughly around the $3325 level, we are basically in the middle here.

Technical Analysis

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The technical analysis for gold is somewhat sideways at the moment, despite the fact that we have seen really tough days. That being said, we also have several central banks this week, and that could cause quite a bit of noisy behavior in this market. I would love to see gold drop down toward the $3200 level so I can buy it again, although a bounce from here makes a certain amount of sense as well. Ultimately, this is a market that I think is simply killing time in the middle of summer to work off some of the excess froth that had been put into the market over the previous year. Gold of course has a multitude of reasons for why it moves, and there’s no way to trade it at the moment without looking at those.

The first thing you need to keep in mind is that the geopolitical situation around the world is getting a bit more stable, but it’s not exactly perfect. We also have to worry about trade tariffs, although the reality is that we are getting several announcements that are actually bullish, so one would have to assume that sooner or later that premium gets taken out of the gold equation. However, if the US dollar continues to weaken, that might be reason enough for gold to go higher regardless. As things stand right now, it just seems like we are fumbling through the markets trying to figure out which direction to go from a longer-term perspective.

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