- Gold markets initially pulled back just a bit during the trading session on Wednesday, but then turned around to show signs of life yet again.
- Ultimately, this is a market that I think continues to see a lot of buying pressure. All things being equal, gold has a whole litany of reasons to go higher, as we have seen a lot of upward pressure, but quite frankly we have more than just momentum pushing this market.
At this point in time, the market looks as if it is running away from risk, meaning that a lot of traders are buying gold due to the fact that it is considered to be a safety asset, and with everything that’s going on in the world right now it does make a certain amount of sense that we would see people piling into this asset. However, there are other things going on right now that could continue to drive gold higher.
Interest rates
Interest rates continue to rise in America, but at the same time traders are betting on the fact that the central banks will step in and cut rates between now and the end of the year. All things being equal, this is a market that continues to benefit from the expectations of central bank monetary policy, and for that matter central banks themselves. After all, central banks have been huge buyers of gold over the last couple of years, and therefore we always have a buyer on every dip given enough time.
Underneath, the $2200 level is an area that previously has been resistance, as there is a significant amount of market memory attached to it, it does make certain medicines that people would be looking for support. If we were to break down below there, the $2150 level then offers support as well. The 50 day EMA is racing toward the $2150 level, and therefore I think that will be your “floor the market. That being said, the $2075 level is the absolute bottom of the trend from what I can see.
Ready to trade today’s Gold prediction? Here’s a list of some of the best XAU/USD brokers to check out.