Gold markets have rallied a bit during the course of the week, showing signs of strength yet again. This follows a massive hammer from the previous week, and at this point time I think what we are seeing is a “buy on the dip” type of situation. However, if we were to break down below the hammer from the previous week, that opens up a huge move to the downside, perhaps down to the $1500 level.
Gold Price Predictions Video 12.04.21
One of the biggest drivers of gold recently has been bond yields, which had been rallying quite significantly. If that happens, then it is likely that we will see this market break down. However, if yields start to taper off or at least slowdown in its momentum, then the market will probably continue to go higher. All things been equal, that opens up the door to the $1800 level, perhaps towards the $1900 level. That being said, if we get to that point and I think that we are more than likely going to go looking towards the highs over the longer term.
One thing that is worth taking a look at is that the market is just hanging about an area that has been important in the past, so it would not surprise me at all to see this market bounce. However, we need the market to prove itself in the short term, perhaps getting some type of break out. We did attempt on Thursday, but it was pushed back on Friday. Clearly, we have a fight on our hands.
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This article was originally posted on FX Empire