- The gold market has rallied rather significantly during the trading session here on Monday, breaking out of the two week range that we have been stuck in.
- We are starting to see a bit of volume jump in this market, and I think a lot of this comes down to people being worried about the trade situation in the United States, whether or not that is warranted remains to be seen, but that's just how markets have been behaving.
Short-Term Pullbacks
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Ultimately, short-term pullbacks continue to be buying opportunities with the 50-day EMA sitting at the $3,321 level and rising. A market rally here does make a certain amount of sense, but I think you also have to look at this as a market that may look at the $3,500 level as a potential target, but I also see that as a potential massive ceiling.
It is summertime trading, and that, I think, is part of your problem as well. Few things will grind more than summertime trading. You can see volume has been drifting lower since April, and we've had a couple outliers here and there, but for the most part, it's been going while price has been going sideways. There's nothing abnormal about that. And I don't necessarily think this foretells some type of massive sell-off, but what I think it does foretell is that we are going to be in this range for a minute.
Once we get through August, things do change quite a bit, but as the situation is right now, I just like the idea of buying short-term dips, taking advantage of value if and when it occurs. If we were to break above the $3,500 level, then I think gold has a real shot at going to $3,800 based on the measured move of the $300 consolidation area. I still believe in long only, but I also recognize that this is a market that just doesn't have any real momentum.
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