- The gold market has been somewhat negative on Tuesday, as traders continue to see a lot of noise overall.
- This is a market that has been very bullish for some time, and the idea of fading this market isn’t something I want to do.
- With that being said, I would anticipate a lot of noisy behavior, and you have to keep in mind that the FOMC Statement comes out on Wednesday, which obviously will have a major influence on not only gold, but the US dollar, making it an extraordinarily volatile time for this market.
Technical Analysis
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The technical analysis for this pair is obviously very bullish, despite the fact that the day on Tuesday was a little bit lackluster. Given enough time, I think we will try to break above the $3500 level again, given the fact that each pullback seems to be less and less impressive. If and when we can break above that $3500 level, the market is ready to rip toward the $3800 level, based on the “measured move” of the consolidation that we have been stuck in for a while.
It’s also worth noting that the 50 Day EMA is near the $3275 level and rising, so this of course is something that comes into the picture as potential support as well. We also have the $3200 level, which is the bottom of said range. I don’t think we break down below there, but if we do then I would have to rethink my strategy for dealing with gold at this point. I would anticipate the $3000 probably defines the entire trend, mainly due to the fact that it is a large, round, psychologically significant figure, and of course we have the 200 Day EMA right around that neighborhood as well. Because of this, this is a market that remains a “buy on the dips”, especially as we have a lot of geopolitical strife that could have people running toward safety at any moment.
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