- You can see gold initially did pull back a bit during the trading session on Monday but continued to find buyers on dip.
- I think that's going to be the way forward. And gold continues to try to push towards the upside, but we recently did see a shot across the bow as it worked, and the market plunged from the $2,400 level.
- This is an area that I think we will try to retest sooner or later. And that’s the rub here: We might have a lot of work to do to get there.
It does make a certain amount of sense, but perhaps we need to find our footing here with the $2,300 level underneath offering a little bit of support. That area, I think, will be defended by the bullish traders out there, and there are plenty of reasons to think that perhaps gold will continue to rally. Overall, this is a market that, given enough time, will eventually digest some of these massive inflows and perhaps continue the overall uptrend.
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Even if We Break Lower…
Even if we were to break down below the $2,300 level, I think at that point, you still have to look at the 50 day EMA as a potential support level, followed by the $2,200 level where we had seen a lot of noise previously. On the upside, the $2,400 level continues to be a major resistance barrier, but if we can break above that, then it's likely that we could go look into the $2,500 level.
The $2,500 level, of course, has a lot of psychology attached to it. But I do think at this point in time, it's very much a situation where the market is looking at that as its potential goal. Geopolitical concerns, interest rates, massive money printing by the American government. These are a lot of different reasons to push gold higher over the longer term, and as a result I am not looking for selling opportunities at the moment. In fact, gold could possibly have much further to go.
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