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Gold Price Forecast – Gold Markets Pull Back After Initial Gap Higher

·2-min read

Gold Market Technical Analysis

Gold markets have gapped higher to kickoff the trading week on Monday, but turned around to fill that very same gap. By doing so, it suggests that we are still in the process of building some type of base in this area, as the $1800 level looks to be heavily defended. Furthermore, it’s also the bottom of a consolidation area, the site of a “triple top”, and where an uptrend line is currently located. All of this coming together certainly offers an area where you could expect to see quite a bit of fight left in the market.

That being said, you need to pay close attention to the 10 year yield, because it has a direct negative correlation to gold most of the time. The US dollar also has its part to play, although that situation overlaps with yields quite often as well. If we were to break down below the bottom of the hammer from Friday, that would be a very negative turn of events, as we would not only break a structural support area, but the reversal candle of the day itself.

On rallies, I do think that the upside is probably somewhat limited in this environment, with $1880 being a best case scenario at the moment. That is the top of the consolidation area that we find ourselves and, so I think it makes quite a bit of sense that we would see that area offer resistance on the way back up. Breaking that changes the entire attitude of the market, but would probably need some type of external force driving it along.

Gold Price Predictions Video for 05.07.22

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This article was originally posted on FX Empire

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