- Gold markets have rallied a bit during the trading session on Thursday, reaching the $3425 region before pulling back just a bit.
- Gold has been very bullish for some time, but there is an area just above current trading that looks as if it is a bit difficult to break above.
- With that being the case, I would be a bit cautious at this point in time, recognizing that we have seen gold fail here more than once.
- This isn’t to say that we won’t continue higher, rather that we may need some type of catalyst to get gold to truly rally enough to break out.
Trend Remains
Regardless, the trend does continue, and that is something worth paying attention to. Because of this, traders will continue to look at this as a “buy on the dip” type of scenario. I wouldn’t want to try to get short of the gold market anytime soon, but I do recognize that a pullback would make a certain amount of sense considering just how much energy has been expended.
As things stand currently, this is a market that looks like it is going to consolidate, and I think you have to trade as such. We are just above the middle point of consolidation between the $3200 level in the bottom and the $3500 level in the top, so I suspect that we are essentially in “no man’s land”, and may start to see gold becomes more or less a short term sideways market that day trading is probably more geared toward. Ultimately, I do think that there will be plenty of buyers on dips, but right now he is a market that still will have to sort itself out, as there are a multitude of geopolitical issues working for it, as well as central banks out there buying it, but at the same time, exhaustion could be a very real problem for this market in this overall vicinity.
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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.
