Gold Forecast: Markets Continue Consolidating

I’m going to assume more back-and-forth noise than anything else.

Gold markets continued to grind back and forth on Monday as yields in America continue to jump above 3% periodically in the 10-year note. Ultimately, this is a market that is also hanging around the 200-day EMA, which is relatively flat. In other words, it seems as if we will continue to just kill time in this general vicinity, while we are trying to figure out what to do with their selves. Gold is being thrown around by a multitude of factors.

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The 50-day EMA has offered significant resistance near the $1875 level, showing that the market is going to continue to be noisy to say the least, as we have then sliced through the 200-day EMA without any issues. The market is trying to figure out where it wants to go next, and it’s a great place to lose money right now. In this type of trading environment, unless you are trading something like a 15-minute chart, there is not a whole lot to do.

That being said, if we break down below the hammer that was printed on Wednesday of last week, that could open up and move down to the $1800 level, which is a large, round, psychologically significant figure. Needless to say, there will probably be a certain amount of interest in the area, so it’ll be interesting to see how that plays out. I think given enough time, we will probably have a further downside if we do test the $1800 level and fail. It’s worth noting that there is a two-year trend line that hangs around that area as well, so that would be a big development.

On the upside, if we were to take out the $1875 level, it could open up a move to the $1900 level, and then possibly even the $2000 level if we can maintain some type of momentum. However, as yields spike the way they have during the day, it will almost certainly continue to cause problems for those who wish to see gold go higher. We have been forming a bit of a rising wedge, but I think it’s so messy at this point it’s difficult to give much credence to that technical pattern. With this in mind, I’m going to assume more back-and-forth noise than anything else.