Gold Price Prediction – Gold Markets Reverse Early Advances

Gold initially surged higher and so displayed signals of strength, but the $1680 barrier remains significant.

Monday’s gold markets attempted a significant rally early in the trading session, but subsequently gave back a considerable amount of their gains. As a result, it’s likely that “sell the rallies” trade will continue to be prevalent. The 50-Day exponential moving average is currently near $1700 and is falling substantially.

If we break below the bottom of the Monday session candlestick, it is likely that we will attempt to fall further and test the “double bottom” that I have noted on the chart. If these levels are breached, it is likely that gold will seek support at $1600 and possibly even $1500.

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Keep in mind that the U.S. currency and increased interest rates in the U.S. continue to act against the value of gold, so I do not believe that anything has necessarily changed. Yes, there is some speculation that the Fed will pivot or slow down sooner than anticipated, but at this point that is simply a story, and every time one of these bear market rallies is founded on a story, it gets crushed.

I believe that whenever you are offered “cheap U.S. dollars,” you should take advantage of the opportunity. Keep in mind that gold possesses many characteristics of a currency, thus you must consider this in terms of XAU/USD. Consequently, I anticipate that the double bottom will be tested during the next couple of days, but if we were to break above $1680, I would watch for a reversal signal near the 50-Day EMA.

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