- The gold market has been fairly quiet during the trading session on Friday, which is probably not a huge surprise considering that it’s the end of the week and it’s also options expiration of monthly contracts on Wall Street.
- So, I think a lot of traders really don’t know what to do at the moment.
- That makes a certain amount of sense because there are a lot of moving pieces at the moment.
All things being equal, I think we are just simply in the middle of summer trading, and that’s why we are behaving the way we are. The 50-day EMA is right in this neighborhood and offers support as well. So, I do think it’s possible that we could make a run back towards the $3,500 level above. If that happens, things get interesting very quickly.
If We Break Massive Barrier
The $3,500 level is an area that’s been very difficult to break above. And if and when we do, that should open up a big move perhaps to the $3,800 level based on the measured move, if you will, of the consolidation being $300. If we were to break down below the 50 day EMA, then we may test the $3,300 level, possibly even the $3,200 level where I see the hard floor.
I have no interest whatsoever in trying to short gold, and I think buying the dip is probably how I’m going to continue to approach this market. Right now, with the Federal Reserve likely to cut rates later this year, I think that supports gold as well. All things being equal, this is a market that I think is just simply stuck in its summer range, and now we are trying to figure out when we can break out of it.
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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.