- Gold markets had rallied to kick off the session on Thursday but have given back quite a bit of gain to turn around and form a very negative candlestick.
- It appears that the gold market is paying close attention to the $1700 level, as it has offered to support a couple of times.
- I would also suggest that perhaps the support level starts there, and then extends all the way down to the $1680 level.
If the market was to break above the top of the candlestick for the trading session on Thursday, then it’s likely that we could test the 50-Day EMA. This of course is an indicator that a lot of people pay close attention to, and if you look at the gold charts over the last several months, it’s obvious that the indicator has influenced the market. Because of this, I think it’s going to be difficult to get above it, which at this point it is sitting just above the $1750 level.
Market Likely to Continue Being Difficult
Speaking of the $1750 level, the market is likely to continue to be important, as it has been both support and resistance, so in that scenario, it does make quite a bit of sense that we would see a certain amount of pressure. However, if we do break above the $1750 level, then the market tests that moving average. Any move above there opens the possibility of the $1800 level. The $1800 level is an area where we had recently peaked, and of course, we also have the 200-Day EMA sitting just above there, and it is drifting lower. It is not until we get above there that I believe the market will have completely changed the trend.
Having said all of that, it is worth noting that the $1680 level is crucial support from the longer-term chart. If we were to break down below there, gold will almost certainly flush lower, opening the possibility of a move down to the $1500 level rather quickly. It also means that the area should be massive support, so I do think that we have a significant fight on our hands over the next couple of weeks. The market will continue to be very difficult, but also very noisy as we are going to see the interest rate markets for old gold around violently.
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