The gold market has been on the rise during the trading session on Tuesday, breaking above the $2000 level in the futures market. This is an important psychological barrier that the market has managed to overcome, and it will be interesting to see whether the market can continue to break out to the upside. There is an area of resistance around the $2020 level that could prevent further upward movement, but if this is broken, the market could go looking towards the $2050 level, and eventually the $2100 level. That being said, the job numbers coming out lower than anticipated in America seems to have put a boost into the gold market and may shorten the amount of time it takes to break out completely.
It is clear that interest rate expectations coming out of the United States are having a significant impact on the gold market, and this correlation is likely to continue. Traders should pay close attention to whether rates are rising or not, as well as the Fed Funds Rate markets, which can give a good indication of where gold may be headed. Despite the potential for the US dollar to strengthen, the market is currently in a bullish phase, and this trend is likely to continue. With the wealth preservation instincts of investors around the world still driving demand for gold, it seems unlikely that this trend will change anytime soon.
The $1950 level is another key psychological level to watch, as it could offer some support for the market. If the market were to break down below this level, it would open up the possibility of a move down to the 50-Day exponential moving average, which is currently sitting at the $1912 level and is rising. However, it would take a significant move to the downside to indicate that the overall trend has shifted.
In Summary
- The gold market is likely to continue seeing attempts to break out and move through the current resistance levels.
- While interest rates and the value of the US dollar are important factors to watch, the overall bullish trend is likely to remain intact for the foreseeable future.
- Traders should pay close attention to the key psychological levels around $1950 and $2020, as well as the potential for a move towards the $2050 and $2100 levels if the market can continue to break out to the upside.
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