- The gold market rallied significantly during the trading session on Friday, gaining well over 1% as the United States is now starting to talk about tariffs on most countries around the world again, and of course has suggested that tariffs on Canada will increase August 1.
- This has the markets worried about the tariff war heating up again, which has never really ended.
- As the markets tend to pay attention to one or 2 specific things at a time, it’s not surprising that we had forgotten about that.
Technical Analysis
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The technical analysis for this market depends mainly on the timeframe you’re looking at. Over the last couple of months, it’s been very sideways, and we are essentially in the middle of a larger range, which is bounded by the $3200 level at the bottom, and the $3500 level at the top. The market has been in this $300 range for what seemed like a lifetime, so if we could break out above the $3500 level, then we could see this market go looking at the $3800 level. Because of this, the market will continue to see a lot of “buy on the dip” behavior, and I think that is probably the best way to approach the gold market as it’s difficult to time when the breakout will occur, but I do think it happens given enough time.
We have simply been working off froth for a couple of months now, as we had been so bullish previously. We had a couple of years there were gold just basically shot straight up in the air, and at this point in time, I think the market just got a bit exhausted. I don’t have any reason to start thinking about shorting this market, but I do recognize that no market go straight up in the air forever. That being said, we have been sideways for a while, and we may be starting to wake up again. I remain bullish, but also patient.
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