Gold Forecast: Markets Continue to Hover Around the Same Level

• Gold markets have pulled back a bit after the FOMC statement, as it looks obvious that the Federal Reserve is going to have to do whatever it can to fight inflation, as the market has seen a 50-basis point rate hike.
• At this point, the market is likely to continue to see a lot of noisy behavior, and the fact that we are sitting right at the $1800 level can have an influence as well.
• All things being equal, the market was to pull back from here, then the 200-Day EMA begins to be questioned.

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The 200-Day EMA currently sits right around the $1765 level, and I think that might be a short-term floor in the market, but I would not necessarily think that is anything major. If we were to break down below there, then it’s possible that the market could have further to go to the downside, and it’s probably worth noting that we are during a “rising wedge”, and this of course will attract a lot of attention. However, the $1800 level offers support, then it will just simply be another move back to find a little bit of value.

Pay Close Attention to the Rising Wedge

At this point, if we can break above the top of the candlestick from the Tuesday session, then it’s very likely that we could go higher, perhaps opening the possibility of a move to the $1875 level. Regardless, pay close attention to the US dollar and interest rates because they do tend to move counter-cyclical to the gold market. Having said that, in an environment that has a lot of inflation and recessionary problems, both gold in the United States dollar can rise at the same time.

All things being equal, pay close attention to the rising wedge, because it could give you an idea as to where we are going over the next couple of weeks. It’s also worth noting that the markets will be focusing on holidays here in the next couple of weeks, and liquidity will almost certainly drop. With that being said, the market is likely to continue to see a lot of volatility in noisy behavior, but it certainly looks as if we are favoring the upside overall. With that, if we do not break down below the bottom of the wedge, it’s very likely that we continue to go much higher.

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