Gold markets initially pulled back during the trading session on Thursday but then turned around to show signs of life again. This confirms that the $1970 level has a bit of “market memory” attached to it. This is an area that previously had been resistant, and now should be supported on pullbacks. Because of this, the market looks as if it is going to continue the overall uptrend, and therefore it is likely to eventually reach the $2000 level.
The market had been sideways for a couple of weeks, suggesting that we are just now getting inertia back into the market, and therefore it is likely that we will start to pick up more buying pressure as we move forward. Gold markets are especially sensitive to inflationary pressures, which of course are quite strong at the moment. The candlestick during the trading session suggests that there are plenty of buyers in general, and therefore I think it only makes sense that we go higher.
Speaking of the $2000 level, we have sliced through it rather easily the last time we got to that point, so I do not think it will be a huge barrier to overcome. Sure, there will be a bit of psychology attached to that level, but that should be something that we overcome rather quickly. At that point, I would anticipate a move to the $2050 level, and possibly even the recent highs.
If we were to pull back from this area, then the $1950 level could come into the picture. After that, then we would be looking at the 50 Day EMA, which of course is rising. Ultimately, the market will find plenty of buyers all the way down to at least the $1900 level, perhaps even the $1880 level. That being said, if we were to turn around a break down below the $1880 level, then the market would fall apart, perhaps reaching the 200 Day EMA, which currently sits at the $1850 region.
Keep in mind that gold is very volatile, but we are clearly in an uptrend, and there is no reason whatsoever to fight it. Because of this, simply looking for value is going to be the best way forward, just as it has been for quite some time. As far as I can tell, gold has already proven itself.
