- Gold markets have been very bullish for quite some time now, skyrocketing since August, and the month of October was no different.
- The market is very noisy at the moment, and at the end of the month, October saw quite a bit of selling pressure.
- There are a lot of questions as to whether or not the uptrend is going to continue with any sense of ease, or if it’s going to be a situation where market participants are likely to see a big turnaround.
Technical Analysis
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The technical analysis of this market is very bullish overall, but it’s also worth noting that the market has seen a lot of volatility and choppiness towards the end of the month of October. After all, markets continued to see a lot of buying of gold until suddenly, it became a story that random people throughout the world started to pay attention to, with lines of people waiting to get into bullion shops in places like Singapore and Australia signaling that the general public had gotten involved, which is typically at the very least, a short-term top.
The $4000 level has been extraordinarily important over the last month, with the psychological importance of that number not to be ignored. The central bank decisions over the next couple of months will have a major influence on what happens next, as market participants anticipate that the Federal Reserve could very well cut rates a couple of times in 2025. The other central banks, such as Japan and Canada, could end up being fairly soft as well, but at the end of the day, it’s the FOMC in the United States that has the biggest influence.
Ultimately, the market looks like it’s a “buy on the dips” situation, but if gold were to break down below the $3700 level, it could open up a significant drop, perhaps down to the $3500 level, possibly even lower than that. If that were to happen, you could see gold give up the uptrend for some time. If the market were to break above the $4400 level, then it would become impulsive again, perhaps getting a fresh leg higher. The next month will be crucial for gold, but it is worth noting that a little bit of sideways action would be the most bullish of outcomes, because it will allow the market to be bullish while becoming accustomed to these elevated levels. We are at a major point of inflection, and these handful of levels will have to be watched.
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