- Gold is slightly negative in the early hours here on Tuesday, but really at this point, I think we’re just meandering.
- We’re floundering. We’re trying to find a reason to get moving one way or the other.
- With that being said, gold is a market that has been range bound for months. So, I don’t find that surprising.
The $3,500 level above is a major resistance barrier that we will be watching as it is a large round psychologically significant figure and basically the all-time high. On a pullback from here, we could see support near the 50 day EMA, which is currently at the $3,340 level. The $3,300 level also could offer support and the $3,200 level underneath there offer support for the market in general
Buy on the Dip Continues?
So, with that being said, I like this as a buy on the dip type of market as we, although are sideways, the reality is that the longer term trend is still very bullish. And part of what you are seeing here is potentially the market trying to work off some of the excess froth that we had seen previously. And with that being the case, I think it makes a lot of sense that you just be patient, and you look to buy gold when it’s cheaper.
I have no interest in shorting. I just think you’re swimming upstream at that point. And I do expect that with all of the geopolitical issues and of course the concerns of the monetary policy coming out of the Federal Reserve. I just think there’s just too much chaos out there to try to short this market. I am looking for cheap gold and I take advantage of it as it occurs in this market. I will not short gold anytime soon in this environment.
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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.