- In my daily analysis of the gold market, the first thing that captures my attention is the fact that we did pull back but seem to be near an area that is presently supported.
- After all, we have seen a lot of action near the $2650 level, and therefore a little bit of “market memory” would make a certain amount of sense as well.
All things being equal, I do like the gold market. I think there are plenty of reasons to think that gold should continue to perform fairly well over the longer term. While I recognize that the US dollar of course is very strong at the moment, the reality is that both gold and the greenback can perform well at the same time, despite the fact what they teach traders quite often. After all, there is a safety aspect of both of these assets, so while the US dollar is preferred, gold could be a way to protect portfolios. Furthermore, you should probably be paying close attention to gold in other currencies as well, as they are being absolutely eviscerated, and gold continues to strengthen against most.
Technical Analysis
The technical analysis for this pair is relatively straightforward. It’s a bullish market that has recently taken a bit of a break, and therefore the fact that we are sitting the 50 Day EMA of course will capture a certain amount of attention, and of course the $2650 level has been an area of extreme action as well. In other was, I think down to about the $2640 level, there’s a very good shot that we would find buyers willing to get in and take advantage of “cheap gold.”
That being said, if we turn around and rally, we will have to eventually pay close attention to the $2725 level, an area that has been a bit resistant a couple of times now. I think more likely than not, we have a situation where we are probably going to go back and forth more than anything else, as we are heading into the holidays, and I think a lot of traders are simply taking a bit of a break at the moment. In other words, I am neutral to bullish on gold.
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