- The gold market has been fairly quiet during the trading session on Friday, which is probably not a huge surprise considering that it’s the end of the week and it's also options expiration of monthly contracts on Wall Street.
- So, I think a lot of traders really don't know what to do at the moment.
- That makes a certain amount of sense because there are a lot of moving pieces at the moment.
All things being equal, I think we are just simply in the middle of summer trading, and that's why we are behaving the way we are. The 50-day EMA is right in this neighborhood and offers support as well. So, I do think it's possible that we could make a run back towards the $3,500 level above. If that happens, things get interesting very quickly.
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The $3,500 level is an area that's been very difficult to break above. And if and when we do, that should open up a big move perhaps to the $3,800 level based on the measured move, if you will, of the consolidation being $300. If we were to break down below the 50 day EMA, then we may test the $3,300 level, possibly even the $3,200 level where I see the hard floor.
I have no interest whatsoever in trying to short gold, and I think buying the dip is probably how I'm going to continue to approach this market. Right now, with the Federal Reserve likely to cut rates later this year, I think that supports gold as well. All things being equal, this is a market that I think is just simply stuck in its summer range, and now we are trying to figure out when we can break out of it.
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