- Gold markets have gone back and forth early during the trading session on Wednesday as we wait for the Federal Reserve.
- The Federal Reserve of course will have a major influence on what happens next and I do think that it is probably only a matter of time before we see this market take off to the upside.
- That being said, there is also the possibility that they do something to spook the market, and we get a little bit of a knee-jerk reaction.
I would be looking to take advantage of any knee-jerk reaction that occurs, as gold has quite a few reasons to go higher. After all, we have a lot of geopolitical tensions out there that continue to be a major issue, and of course we have to pay close attention to the idea that the central banks around the world will continue to be net buyers of the metal. Furthermore, it also looks like interest rate cuts will continue to push this market to the upside over the longer term, so all things being equal, this is a market that should continue to see plenty of interested parties.
The Floor in the Market
At this point, I believe that the floor in the market is somewhere near the $2075 level. Any pullback toward that area will almost certainly attract attention, and a lot of value hunting from what I can see. I have no interest in getting too cute here, I believe this is a market that will eventually find plenty of buyers. The 50-Day EMA happens to be crossing that area as well so it all comes together quite nicely for a potential value opportunity if we do in fact drop.
Pay attention to the interest rate markets, because they will dictate where we go next. If interest rates start to drop, that will be extraordinarily strong for gold, and it could send this market above the $2200 level rather quickly. If that were to happen, I think you will see a lot of FOMO trading as traders step in to pick up on momentum.
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