Gold Forecast: Markets Have Rough Thursday Session

• Gold markets have pulled back a bit during the trading session on Thursday, as we have seen the ADP numbers come out much hotter than anticipated.
• This has people worried about the Federal Reserve remaining very tight with monetary policy, so people start to buy the US dollar.
• Because of this, the market will more likely than not continue to see a lot of volatility, especially as the Friday session is the jobs number, which always causes a bit of noise.

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At this point, if we get some type of significant pullback, I am more than willing to buy gold, because people have been using it as wealth preservation for a while. Furthermore, the market has shown itself to be rather resilient, especially as the market continues to see the idea a tight fed as negative, but at the same time there is the concern that wealth preservation is going to be the number one thought of traders. If that’s the case, a lot of times gold will get bought into to protect accounts. Furthermore, a lot of central banks are doing the exact same thing and we have the 50-Day EMA crossing the 200-Day EMA, which is the so-called “golden cross.”

Waiting to Buy the Dip

This indicator typically has a lot of longer-term traders paying close attention to it, so I think more of the “buy-and-hold” crowd is going to come to the forefront. I think at this point, the market is likely to see more of a “buy the dip” mentality, which does make sense considering how we have seen this market play out. With this being the case, we continue to see value hunting going forward, and I think the $1800 level makes for a nice support level.

If we were to break down below the $1800 level, then we could go looking toward those moving averages as a support level, but I think that would take a ton of momentum to the downside, and therefore I don’t see that happening anytime soon. True, the job number could cause a little bit more volatility, but I think it’s only a matter of time before the value proposition comes into the picture and people will start jumping on the bandwagon. Because of this, I’m going to bide my time and wait for an opportunity to get long again at the first signs of a bounce.

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