By FXEmpire.com
The gold markets had a back and forth kind of week over the last five sessions, but did manage to find support at the $1,640 to $1,650 area that was flagged as important by us on the daily charts, suggesting that the upside was going to continue to be the favored direction overall.
The world’s central banks are presently looking to ease monetary policy on the whole, and this will always push the demand for gold higher. The same central banks are currently buying gold as well, so having said that it looks as if the fundamentals for gold will continue to be good, and as a result the uptrend should continue for the foreseeable future.
The weekly candle from the previous week was a hammer, and this week broke to the upside from that buy signal. Granted, the action saw the market fall from the highs, but in the end this market still looks as if it is winding up. Without a doubt the whole situation around the possibility of “QE3” out of the Fed will be a major driving force in this market, so that ongoing debate will have to be watched as well.
The $1,700 level above is resistance, and that is the area that we need to see cleared in order to continue the run higher in this market. The gold markets look healthy overall across all months, and because of this we are even more confident that the $1,700 level will give way eventually. The next level above there is the $1,800 mark, and we feel that there will be a real fight at that point. It is there that the strength will be shown.
In fact, if we can get above the $1,800 handle, we suspect the majority of traders will be piling on at that point and ready to continue the move much higher. We still suspect that the $2,000 level will be hit sometime this year, and at this point in time we see no real reason to change that forecast.
Gold Forecast for the Week of April 2, 2012, Technical Analysis
Originally posted here
