- The gold market fell somewhat significantly during the trading session on Tuesday in the early hours, as we continue to see a lot of behavior.
- It is in an environment that obviously lends itself to be a bit difficult, as there are a lot of questions about whether or not geopolitics will get better or worse, but we also have a lot of noise coming out of the bond market.
- Remember, the bond market has a direct influence on what people do with gold and currencies, so it’s not a huge surprise to see that the market is a little bit of a mass at the moment.
Technical Analysis
All that being said, the technical analysis for gold is generally bullish, as we had rallied quite nicely over the last several months, and ultimately, I think you’ve got a situation where sooner or later, buyers will come in to pick up gold based upon “value.” The most obvious support level on the chart right now is the $3200 level where the 50 Day EMA currently resigns and is rising and therefore gives us at least 2 reasons to think that this area will hold. In the meantime, the $3290 area has offered support as well, at least over the last couple of days. In other words, if we do drop from here, it’s likely that we would see this market find at least some interest below.
To the upside, the $3500 level could offer a bit of a ceiling, and a potential target for those who are bullish. That could be a massive barrier to the market, but if we were to break above that level, it would certainly open up a massive amount of buying pressure as it would to signify the next leg higher. If we break down below the $3200 level, then it’s possible that the market could go looking at the $3000 level underneath for a bit of a floor.
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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.