Gold Price Forecast – Gold Smacks Into Resistance

(October 26,2022-Christopher Lewis)

Gold markets have rallied again during the trading session on Wednesday but have found sellers at the all-too-familiar $1680 level.

Gold Market Technical Analysis

Gold markets have rallied again during trading on Wednesday, slamming into the $1680 level. This is an area that has been important multiple times in the past, and was the bottom of the market for several years. Now that we have sliced through it a couple of times, it should start to lose some of its influence, but it is a bit surprising to see that it still has some. Regardless, I do believe that as long as interest rates remain elevated the United States, it’s difficult for gold to truly take off. If we break down below the bottom of the candlestick for the trading session on Wednesday, a lot of people will look at that as a potential signal to start selling again.

If we break that double bottom underneath, then the $1600 level will be targeted, followed very quickly by the $1500 level. Breaking above the $1680 level does offer a little bit of bullish momentum, but the 50-Day EMA sits just below the $1700 level, and of course we see action near the $1725 level that suggests there should be plenty of selling pressure.

In this environment, it’s difficult for gold to do well, as bonds are starting to pay reasonable interest again. Whether or not that remains is a completely different question, and of course if the central banks around the world were to start easing monetary policy again, gold is probably the first place you want to start thinking about buying. In this environment though, things are not quite conducive for a strong gold market, so it’s more or less going to remain a “fade the rally” scenario in this market.