- The Thursday session was very negative for gold, as it lost 1.65% by the time New York started to close for business.
- At this juncture, it looks like gold is ready to pull back a bit, but at this point, it is still very much a bullish market, so I don’t have any interest in shorting.
- I believe that the $1880 level could very well be massive support, based upon the fact that it was massive resistance previously.
- Furthermore, I think there will be plenty of people out there willing to buy dips, as there is a lot of demand for gold now. In fact, this is a bit of a “FOMO trade”, so it makes a lot of sense that we see this market find plenty of momentum given at a time.
If we were to break down below the $1880 level, it’s likely that we could go down to the 50-Day EMA, and then perhaps down to the $1840 level. At this point in time, I think there would be enough value that traders will almost certainly come back into the market, especially now that it’s become painfully obvious that traders don’t care what the Federal Reserve says, and therefore I anticipate that gold will continue to see plenty of demand.
Wait for Value
On the other hand, if we turn right back around and break above the top of the candlestick for the trading session on Thursday, then it opens the move toward $2000, which is exactly where I think we do go eventually. After all, it was a major high that has yet to be retested, so I like the idea that we get there eventually, and if the US dollar continues to plummet, that makes a lot of sense that we would see the gold market take off as well.
In general, I just don’t see a situation where you would be selling gold, at least not anytime soon. Because of this, it’s simply a matter of waiting for a little bit of value that you can take advantage of and do so. That’s been the trade for quite some time, and I don’t see that changing in the next 24 hours. What will be interesting is to see how the trading public feels about holding gold into the weekend.
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