The gold market dropped a bit during the trading session on Tuesday, as sit at the 50-day EMA without any interesting movement in one direction or the other. This is a market that I think is just killing time until we get some type of catalyst to get moving. As you can see, we have been right in the middle of the overall consolidation for the last couple of days, with the market essentially at “fair value.”
The $1790 level underneath is support as the $1830 level above is resistance. As we are sitting in the middle of this overall range, then there is really nothing to do at this point. Gold is a market that I do not have much interest in, but I do recognize that a lot of short-term traders like to play “ping-pong” with this market on short-term charts. If that does in fact fit your trading forte, then it would make sense to pay attention to five-minute charts or the like. That being said, if you are a longer-term trader when it comes to commodities, or at least a swing trader, there is nothing here for you.
If we can break above the $1830 level, then I think we will more than likely go looking towards the $1860 level, which is the top of the gap that you can still see on the chart. On the other hand, if we were to turn around and break down below the $1790 level, then it is possible that we will go looking towards the $1750 level. That is an area that has been rather supportive in the past, so I think it could cause a bit of a reaction. If we were to break down below there, then it is likely that the market will go looking towards the double bottom at the $1690 level. If that were to give way, then you could be looking at a move down to the $1500 level rather quickly. As far as an explosive move to the upside, I believe that the $1900 level will be very difficult to overcome without some type of massive US dollar selling or the like. At this point, I do not see that happening, so I think more than anything else we are killing time between now and the jobs report.
