- Gold remains volatile around the $4,000 level after finding support near $3,920.
- While resistance extends to $4,100, the metal appears to be consolidating, suggesting potential stability if prices hold sideways rather than surging higher.
Gold initially gapped lower to kick off the session here on Wednesday, but found enough support near the $3,920 level to turn things around and show signs of strength again. Ultimately, we did test the $4,000 level, but we really didn’t break out above there. With that being said, if the market were to break above the $4,000 level, I still see a significant amount of resistance all the way up to the $4,100 level.
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Volatile and Choppy
This is a market that I think continues to see a lot of volatility and choppiness as we are trying to determine where to go next. After all, we had recently seen a massive rally to the upside that shot all the way up to the $4,400 level, only to plunge quite rapidly. By doing so, it looks as if the market was ready to turn around in general, but the $4,000 level seems to be a bit of a magnet for price.
The 50-day EMA sits underneath, offering significant support, and I think a lot of people will continue to watch that very closely. If we were to break down below the 50-day EMA, then it could open up a move down to the $3,800 level. When the market reaches the $3,800 level, I think there’s a little bit of market memory that comes into play due to the fact that it was the target of the ascending triangle that we had broken previously.
Ultimately, this is a market that I think continues to be somewhat sideways in the short term. And if that’s going to be the case, that’s actually bullish due to the fact that markets might be getting comfortable with the idea of $4,000. That being said, I don’t know if we have any significant amount of exponential upward-moving pressure to send the markets. So, I think ultimately, this is a market that may have peaked. I don’t know; we’ll just have to wait and see. The last thing we want to see is the market go straight up in the air. I’d rather see it go sideways for a while in order to get people comfortable and continue to hold gold.
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