Gold markets initially tried to rally during the trading session on Wednesday but gave back the gains as it looks likely that we will continue to pull back a bit. All things being equal, the market is likely to see the $1700 level underneath to be somewhat supportive, based upon the fact that it is not only a large, round, psychologically significant figure but it was also previous resistance that a lot of “market memory” will be attached to it. Looking at the most recent low, if we break down below it then I think that it will kick off a move much lower.
Gold Price Predictions Video 25.03.21
In fact, my base case scenario now is that we will continue to see gold drift lower, and then eventually break down below that level. If we do, then it is likely that the market goes down to the $1500 level. That is an area that I think is even more psychologically and structurally important, and an area where we could see a longer-term turnaround. However, if we were to turn around and break above the $1750 level, then we could go looking towards the $1800 level.
If we can break above the $1800 level, then the market is likely to go much higher to reach towards the $1950 level. I do not see that happening unless something major happens with the US dollar, which certainly looks as if it is trying to strengthen from a substantial loan. Keep an eye on interest rates in the niceties, because if they continue to rise that will work against the value of gold without a doubt.
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