- The gold market rallied during the early hours on Friday, as the Israeli airstrikes on Iran has caused a lot of chaos in the financial markets.
- People jumped into the gold market in order to find some type of safety for their portfolios, and I think you have a situation where we are more likely than not going to continue to see people interested in gold.
- However, there is a lot of resistance above that extends all the way to the $3500 level, a large, round, psychologically significant figure.
Technical Analysis
The technical analysis for this gold market is obviously very bullish, but I see a lot of resistance that extends all the way to the $3500 level that will be difficult to get above. Furthermore, there is a significant amount of headline risk over the weekend, so we will have to see how that plays out. After all, the Iranians have not returned any type of military action, and the very well could over the weekend. Furthermore, the Israelis could step up their attacks, both of which could have traders looking for safety in the form of gold.
Short-term pullbacks are likely to be buying opportunities in this market, because this is a scenario where we have seen plenty of buyers willing to get involved, and I think that continues to be the case. The $3300 level is an area that I think is rather important, especially now that the 50 Day EMA is racing toward that area. If we were to break down below the 50 Day EMA, then we could go looking to the $3200 level which is a massive support level. Anything below could open up a move to the $3000 level, where I believe that the trend is clearly defined, especially with the 200 Day EMA reaching that region.
If we were to break above the $3500 level, then it’s likely that we could see this market go looking to the $3700 level, followed by the $3800 level based on a couple of measured moods of the consolidation that we have been in. At this point, I prefer buying short-term dips because I do believe they offer plenty of opportunities.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
