By Gold Forecast: Continues to See Downward Pressure – 12 September 2022
I would be cautious with my position size, but once we break out of this little range that we are in, we could have a bigger move that could be worth taking advantage of.
The shape of the candlestick is a bit of a shooting star, just as we have seen over the last couple of days, and therefore I think we are essentially trying to build some type of trading range. The $1680 level is significant support, and it is an area that’s going to be difficult to break down through it. If we were to break down through the $1680 level, then likely that gold will fall much further, perhaps down to the $1500 level.
If the market were to turn around and break above the $1725 level, then it’s possible that the market could go looking to the 50-Day EMA. If we were to break above there, then the market is likely to go looking to the $1800 level, but at this point, the level seems like a bit of a pipe dream for this market. If we were to break above there, it would signify a complete change of attitude for this market and complete a massive “W pattern” from the double bottom that could in theory be part of the chart.
I suspect more than anything else, we will see a lot of volatility in choppiness, meaning that we will probably see a lot of noisy trading. That would not be surprising at all considering just how difficult the overall macroeconomic environment is now. The noisy trading should continue, so therefore I think it’s probably more likely than not going to be a market that will probably be traded on short-term charts more than anything else. I would be cautious with my position size, but once we break out of this little range that we are in, we could have a bigger move that could be worth taking advantage of. Until then, trade small and be nimble, because that’s probably the only thing you can do in this environment.
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