- Gold markets have rallied a little bit during the trading session on Wednesday, gaining on the back of frayed nerves when it comes to the markets, and now look like they are trying to do what they can to threaten the $3400 level.
- The $3400 level is a psychologically important figure, but the market has been above there are at least 2 other times in the recent past, so I don’t worry too much about it, other than to mention that the level might have options traders looking at it.
Technical Analysis
When I look at this chart, it doesn’t take much to understand that this is a very bullish market overall, and it’s possible that we will eventually continue the overall uptrend. The market has been moving on a lot of different factors, not the least of which would be the trade war, but we also have plenty of geopolitical issues out there that could come into the market as well. As long as that’s the case, and central banks out there are buying gold, it’s difficult to imagine a scenario where gold drops significantly, and people don’t step in to buy it.
I am a buyer of dips in this market, and I think there is a significant amount of support near the $3200 level. The $3200 level is an area that has already proven itself a couple of times, both as support and resistance. We also have the 50 Day EMA sitting just above there, so that might be worth noting as well. As long as we can stay above the $3200 level, I don’t think much has changed in this market, and I do think that it is probably only a matter of time before we try to get back to the $3500 level and perhaps even eventually break out above there. As far as the trend is concerned it’s not until we break down below the $3000 level that I would be concerned about the uptrend from a longer-term standpoint.
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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.