- Gold initially rallied during the trading session on Friday to get near the $4400 level, only to turn things around and show signs of negativity as we reached toward the crucial $4200 level.
- This is a very bullish market, but this nasty candlestick could be the beginning of something bigger going forward.
- After all, markets cannot go straight up in the air forever, and sooner or later, you are going to have to give back some of the gains to attract value hunters.
Technical Analysis
Top Regulated Brokers
The technical analysis for gold obviously is very strong, and the $4200 level is likely to continue to be supported. That being said, if we were to break down below there, then the $4000 level will be a potential floor. The $4000 level is an area that will attract a lot of interest due to the large, round, psychological impact of these big figures, so as long as we can stay above there, I think there is a fair chance that the uptrend continues.
All of that being said, this is a market that has been very strong, but all things being equal, this is a market that has a lot of things working for it, not the least of which will be the fact that central banks around the world are continuing to collect gold, as it is being used to shore up balance sheets. Ultimately, this is a market that I think continues to be more or less a “buy on the dips” scenario, but the market also has to keep in mind that we had gotten so bullish and so overdone that it makes a certain amount of sense that a little bit of negativity comes back into the gold market. In fact, it’s probably the best thing that could happen to the bullish run.
The size of the candlestick obviously is pretty negative, but I think you’ve got a situation where it’s only a matter of time before buyers come back into this market in order to try to pick up “cheap ounces.” That being said, this is a very dangerous market but I still prefer gold over silver.
Ready to trade today’s Gold prediction? Here’s a list of some of the best XAU/USD brokers to check out.