Looking at the upcoming May 23 trading session, gold markets could be the place to be. In this CFD chart, you can see that there are several things happening at one point in time that makes this a very nice technical setup. The first thing that we would notice of course is that we are in an uptrend, so obviously want to be buying and not selling.
On this chart, I have the 50 day exponential moving average, and of course the uptrend line of the most recent action. Of coincidence is the $1250 level which has acted as support a couple of times, as well as resistance. The 50 day exponential moving average slicing through the action on Thursday and Friday tells us that the shorter-term momentum should be somewhere in this neighborhood. As long as we can stay above the uptrend line, this is essentially a “buy only” market.
Gold forecast: continuing strength
Because of this, we believe that there will be continued strength in this marketplace, and that we will more than likely try to reach towards the $1280 level. Above there, we will then test the $1300 level which was the scene of the most recent highs. You obviously need to pay attention to the dollar as well, as it has a negative correlation to gold quite often. However, do not let anybody tell you that it has to work that way, it certainly does not. It’s just another reason to think the gold could go higher.
Dips at this point in time should continue to be buying opportunities as long as we can stay above the aforementioned uptrend line, and if we break down below there it more than likely will send this market back to the $1200 level looking for real support. That should be massively supportive area going forward. With all of the loose monetary policy coming out of super banks around the world though, I am very hard-pressed to think the gold is going to fall for any real significant amount of time as central bankers continue to flood the markets with loose monetary policy and liquidity.