Gold Forecast Today - 23/12: Gold Stages Comeback (Chart)

(MENAFN- Daily Forex)

• What markets rallied rather significantly during the trading session on Friday, breaking above the top of the inverted hammer from the Thursday session.
• This is a very bullish sign and suggest that perhaps we could see a bit of follow through.
• Whether or not that actually happens remains to be seen, but at this point in time it is worth noting that at least some animal spirits have returned.

I think given enough time, the market will probably go higher, but I also recognize the fact that at this time of year, there is a significant concern when it comes to volume. After all, most traders will be worried about the holidays and not so much about the trading markets. Ultimately, this is a situation where short sellers probably aren't willing to be short of anything over the market holidays, and therefore I think it makes a certain amount of sense that we got a relief rally. However, I also recognize that the market had been bullish before, so it makes quite a bit of sense that we will eventually see the attitude creep into the market.

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The gold market breaking above the top of a significant inverted hammer is of course a very bullish sign, and then after that we have the 50 Day EMA above, which would be a bit of a barrier that a lot of people would be paying close attention to. If we break above there, then it opens up the possibility of the gold market going to the $2725 level. Anything above that level would break the back of a“double top”, as we have recently seen that area offer noisy trading. If we break above that, then we are free to go to the all-time highs again.

On the other hand, if we were to break down below the $2550 level, then it's possible that the market drops significantly, although the 200 Day EMA could come into the picture. As things stand right now, I prefer to be a buyer of gold than a seller, although I'm not extremely bullish either.

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