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Gold Markets Testing Top of Range
By: Christopher Lewis | January 13, 2022

• Gold markets have pulled back a bit during the trading session on Thursday as we are testing the top of an overall range. With that in mind, it is not a huge surprise to see that we have dropped a bit.

Gold markets have been in consolidation for a while, and therefore it should not be a huge surprise to see that we are trying to pull back a bit from the top of that range. The $1830 level is significant resistance from what I can see, and therefore it is worth paying close attention to the fact that we cannot break above there. To the downside, I think the $1800 level will continue to be important, not only from a psychology standpoint but also from the fact that the 50 day EMA as well as the 200 day EMA is sitting right there.

If we do break down below there, the bottom of the overall consolidation is probably closer to the $1780 level. That is an area that I think will continue to see a lot of noisy behavior, but at the end of the day I also recognize that a break down below that would be somewhat catastrophic for gold, but probably needs to see a strengthening US dollar to make that happen. At that point in time, we could see a severe break down but what we have seen over the last couple of weeks has been simple chop around the major moving averages, and I would anticipate more of the same is likely to happen. If it does, then you can just simply play this is a range bound market, but I would keep my position size somewhat small, as a lot of concern could come into the picture due to Federal Reserve shenanigans.

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