- The gold market was very strange during the trading session on Monday, initially dropping as everybody ran toward the US dollar for safety.
- That being said, gold is a safety asset as well, and one would have to wonder whether or not traders would just simply try to raise liquidity for failed positions.
- Ultimately, we are trying to form a bit of a hammer, which is a major victory for the gold market considering just how crazy everything was at the open.
Geopolitical Risks
Top Forex Brokers
There are still plenty of geopolitical risks out there, and that of course does favor gold. The fact that we recovered also favors gold, but that should not be a huge surprise considering that the Americans bombed the Iranians over the weekend, and people will be looking to protect their portfolios. Furthermore, we had already seen a massive bullish run previously, so it does make a lot of sense that traders trying to continue that run higher. In other words, it is “business as usual.”
If we break down below the bottom of the candlestick for the trading session, then we could open up a move down to the 50 Day EMA, right around the $3300 level. The $3300 level of course is a large, round, psychologically significant level, and an area that has seen some action previously. If we were to break down below there, then we could open up a move to the $200 level.
Ultimately, this is a market that I think given enough time will have to make some bigger decisions, but right now, it looks like we are in a bit of a “holding pattern”, which makes sense considering that nobody really knows what to expect next. The longer term uptrend does suggest that eventually we will find enough buyers to come into the market and threaten the crucial $3500 level, which for me would be a major signal that we are eventually going to break out and continue higher, which is my thesis at the moment but that doesn’t mean that it will be easy to get there.
Ready to trade our Gold forecast? We’ve shortlisted the most trusted Gold brokers in the industry for you.