- The gold market has rallied again on Tuesday as we continue to see a lot of noisy but positive trading.
- We are well above the $2900 level now, and it suggests that we are going to continue to go higher based on the price action during the day.
- At one point in time, we had seen a little bit of selling pressure but that has been abated and now it looks like gold is ready to continue to be a major part of most people’s portfolios.
Technical Analysis
The technical analysis for the gold market is obviously very bullish, and it does look like it is probably only a matter of time before we see gold challenge the $2950 level, an area that was a short-term swing high. After that, we have the possibility of the market going to the $3000 level, which is a large, round, psychologically significant figure, and an area that I think given enough time probably would attract a lot of headlines noise. I would also expect the $3000 level to be an area where you see a lot of options trading, and that of course can cause a lot of noise.
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On the downside, we have the 50 Day EMA sitting just above the $2800 level, which is a large, round, psychologically significant figure and an area that’s previously been resistance. With this being the case, I think that it is the short-term “floor in the market” that we see at the moment, and with the falling US dollar and of course interest rates in the United States falling as well, I think you continue to see the gold market do fairly well, as traders will continue to look at this through the prism of playing the geopolitical issues, the global slowdown, and perhaps more importantly at the moment, the slowdown of the US dollar. If that’s going to continue to be how the currency markets trade, the gold market should continue to follow right along.
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