Gold Price Forecast – Gold Markets Continue to Attract Support
Gold markets have rallied slightly during the trading session on Thursday (12th Thursday,2020), showing signs of life again just above the US$1850 level. That being said, the market has been interested in this area more than once.
If we do break down below here, the US$1800 level then becomes the next focus of support, as it is a large, round, psychologically significant figure in the scene of the major breakout previously.
If the market does reach that area, you should also pay attention to the fact that the 200-day EMA is sitting right there as well. This offers an opportunity for longer-term traders to get involved, and at this point in time I think there would be a lot of people interested in trying to pick up gold “on the cheap”, as central mix around the world are certainly going to be flooding the markets with liquidity given enough time.
Ultimately, I do not have any interest whatsoever in trying to short this market, because the longer-term outlook for this market will continue to be positive due to central bank intervention and of course concerns about safety in general.
If the coronavirus situation continues to cause major issues, then we are looking at a scenario where people may be looking to pick up gold in order to protect wealth in a slowing economic situation as well.
You can make an argument for gold going higher regardless of what happens next, just due to the central banks but when you start talking about currency destruction and economic slowdowns, gold is a bit of a “safety trade” as well.
Written by Christopher Lewis