The gold market has rallied nicely on Tuesday, as traders are looking to determine whether or not rates will drop in the US, allowing them to push the gold market higher.
Gold Market
The gold market has rallied pretty significantly during the trading session on Tuesday as we have seen rates drop again and there are signs that perhaps the Iranians are thinking about peace as well. If that is the case it probably cools off the interest rate situation in the United States and other economies and therefore allows gold to rally.
I do think this is a market that has been trying to break out for a while, so we are in the middle of trying to determine whether or not we are going bullish or if we are just dropping. All things being equal, this is a market that I think continues to see a lot of headline-driven moves and therefore it is very difficult to be aggressive in.
Technical Resistance and Support Levels
Breaking above the $4,600 level though is a big deal and I think that is rather important. With this, I am relatively bullish longer term, but I also recognize that we are 1 or 2 headlines away from seeing this market roll back over and people running into the US dollar.
If we break higher the $4,800 level is backed up by the 50-day EMA as well so I do think that could be a bit of a headache. Short-term pullbacks that maybe bounce a bit from the $4,600 region for me make for nice entries. I do think that the only thing you can count on is that things are going to be very noisy and in this environment that could cause quite a few stop-outs if you are not wide with your stops.