- Gold has been very noisy during the session here on Thursday as we try to sort out where to go next.
- Ultimately, this is a market where I think given enough time, we’ll have to make a bigger decision.
- But right now, I think what we’re doing more than anything else is just simply grinding away near the 50 day EMA and trying to determine whether or not the uptrend continues.
I think that probably the case will be given enough time because the US dollar is falling against the Euro that typically has somewhat of a correlation. Plus, we also have to keep in mind that central banks around the world continue to buy gold. One of the things that doesn’t work in the favor of gold is the fact that we have seen a lot of tension in the Middle East disappear. And that of course has people perhaps collecting profit in gold, not necessarily worried so much about filling their account with it to protect their other assets.
Two Major Levels to Watch
All things being equal, the $3,200 level underneath is massive support with the $3,500 level above as massive resistance. I think given enough time; any pullback probably gets bought into. And the last couple of days being somewhat stable is from what I can see a very bullish sign because we had fallen so hard a couple of days over the last couple of weeks and now, we are just simply drifting sideways.
In other words, people are comfortable with price being right here. I favor the upside. I’m not looking to short gold under any circumstances. The question is will the 50 day EMA offer enough support to cause a bounce or am I buying it closer to $3,200?
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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.
