Gold markets rose during the session on Wednesday, as we broke above the $1250 level I mentioned yesterday. Now that we have done this, it confirms that we should continue to see bullish momentum in the gold market as there are a lot of concerns when it comes to the Federal Reserve and the interest-rate hikes that should be coming this year. At this point in time I have to say that it looks very unlikely that we will see as many interest-rate hikes as once thought. Because of this, gold will continue to climb as it is an inflationary hedge, and of course tends to move in the opposite direction of the US similar overall would suddenly finds itself in serious trouble.
Buying pullbacks
At this point in time I feel that the best way to trade this market is simply buy pullbacks as they occur, as I believe that we will reach towards the $1300 level, perhaps even farther than that given enough time. It will probably be fairly choppy, but at the end of the day I believe that the buyers have control over this market right now, and of course the longer-term trend is to the upside.
The red moving average on the chart of course is the 50 day EMA, while the green one is the 100 day EMA, and the black moving averages the 200 day EMA. They have a nice spread to them, which typically means that we have quite a bit of underlying pressure and the trend is of course very strong. I think that longer-term buyers are coming into the gold market and purchasing, and that will more than likely continue to be the case going forward as there are plenty of reasons to think gold will do better on the US dollar. After all, there’s a lot of concerns as we have to worry about growth in places like Europe, and of course the vote in the United Kingdom. All that leads to an uncertainty, and sometimes gold works as a bit of a safety play also.
