Gold Forecast 12/12: Rallies As Fed Sets The Tone (Video)

(MENAFN- Daily Forex)

• Gold gapped higher and continued surging, supported by strong momentum, central bank buying, and easing Federal Reserve policy.
• The $4,200 area remains key support, while targets extend toward $4,400 and potentially $5,000 amid a firmly intact uptrend.

Gold has gapped higher to kick off the trading session here on Thursday, only to take off and really start to move to the upside. Ultimately, this is a market that I think, given enough time, we'll try to break to the upside and challenge the $4,400 level because there's really nothing out there worth trying to turn things around and shorting this market.

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With this being the case, I think you have to look at this as a market that has a significant floor underneath it. And it's probably only a matter of time before the buyers get involved. And the $4,200 level has been important multiple times, both up and down. So I think there's probably market memory just waiting to be had in that general vicinity that should offer support. If we were to break down below the $4,200 level, then it could open up and move down to $4,100 and the uptrend line, as well as the 50-day EMA.

Support Zones and Policy Tailwinds

But with central banks out there purchasing gold and, of course, gold's momentum just by itself, there are a lot of reasons to think that we go higher. Furthermore, the Federal Reserve has cut interest rates, and it is starting something that looks a lot like quantitative easing, but they refuse to call it that. And therefore, it makes sense to go to rallies again.

EURUSD Chart by TradingView

I do think given enough time, we get to the $4,400 level, but it might be noisy along the way. Either way, we're in a strong uptrend that has not changed. I certainly have no interest in shorting this market. And I think next year we could very well be looking at $5,000 an ounce.

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