- Gold had a very strong session during the Monday trading session.
- And it does look to me like it's a market that is trying to keep the uptrend intact.
- That being said, I could also make an argument that we could very well end up going sideways for a while with the $3,200 level underneath being a bit of a floor, and the $3,500 level above being a bit of a ceiling.
Ultimately, this market will continue to be very noisy, but I still think it favors the overall upside. There's really no reason to start shorting gold, although it doesn't necessarily mean that it's going to take off straight up in the air anytime soon either. After all, we've seen quite a bit of excess volume to the upside and now you have to have a little bit of digestion or a pullback.
Sideways. For Now…
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Right now, it looks like it's going to be more or less digestion and that means sideways action. Keep in mind that the Federal Reserve meeting is on Wednesday and that probably has a lot to do with what we are seeing here and as a result I do like the idea of buying dips, but I also recognize that it's probably not going to be until after the Wednesday session that we get clarity in one direction or the other.
If we break down below the $3,200 level, we have the 50 day EMA in the same neighborhood offer and support. And if we can break the $3,500 level, well, then we're just in fresh air to continue to just simply take off to the upside. I don't necessarily think that we will go straight to $4,000, but it would not surprise me at all to see this market really start to see upward momentum above that crucial $3,500 level. Keep in mind, gold does tend to move on a lot of different things, but there are plenty of geopolitical issues out there that could really get this market flying. All it would take is one tweet from President Trump, and you could see gold skyrocket again.
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