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Gold Markets Gap Lower to Kick Off the Week
By: Christopher Lewis | April 10, 2023

• Gold markets have gapped a bit to the downside to show signs of weakness on Monday, turned around to fill that gap, and now look as if they are ready to fall yet again.

Gold Market Technical Analysis

Gold markets have gapped lower to kick off the trading week on Monday, as it looks like a little bit of profit-taking is probably going on. If we continue to see this, it’s very likely that we will see a certain amount of value hunting in this general vicinity. After all, we are hanging around the $2000 region, which in and of itself makes for a nice headline.

That being said, if we break down below the $2000 level, and we very well could, the $1975 level is another area where you might see buyers. In that general vicinity, I would expect to see quite a bit of support. If we give that up, then we could go down to the 50-Day EMA. It’ll be interesting to see how this plays out, but you can see that we have had a massive impulsive move to the upside a couple of weeks ago, and now we have seen a lot of choppiness in more of a grinding channel. This is quite often what you will see at the end of an impulsive move to the upside, so I do think that a pullback makes quite a bit of sense, not only from a profit-taking standpoint, but from a technical standpoint as well.

This is not to say that I think gold is suddenly going to enter some type of bear market. I think it more or less speaks to the lack of momentum at this point, and those who got into gold a few weeks ago are more willing in an environment like this to take profits off a move that has been almost $200. That being said, I don’t like the idea of chasing this market, but I do recognize that if we break up above the gap, that would be an extraordinarily bullish sign and could send this market toward the $2050 level, which opens up the possibility of a move to the $2100 region. Either way, I don’t like selling gold, but I would not be a buyer until we get some type of supportive action on this pullback.

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