Gold Markets Still in an Uptrend - 22 February 2019

Gold markets got hammered on Thursday as the US dollar strengthened a bit, and of course we had hit major resistance. However, by the end of the day we are parked at a significant level that should offer a bit of support. The 1325 level was major resistance, and now we have come complete round turn from the rally. I believe that it’s only a matter time before the buyers come back in and try to pick this market up, but the close was a bit to be concerned about.

Gold markets have extended to the downside rather drastically, showing signs of panic selling, but I would be the first to point out that we are still in an uptrend, and the consolidation between $1325 and the $1350 level above should continue to be a major force to deal with. Nonetheless, this is a market that is extraordinarily bullish with the central banks around the world continue to jump in and pick up gold, and I think that will continue to be a major driver.

Soft central banks around the world should continue to make precious metals attractive, not to mention the fact that the Federal Reserve is suddenly a lot more dovish and it should continue to put bearish pressure on the US dollar longer-term. If that’s going to be the case, then gold hymns a bit of a tailwind going forward. I do recognize that the $1350 level is major resistance, but we will probably break through there given enough time. Once we do, this market will go looking towards the $1400 level in my estimation.

Gold

We could fall from here, but that only sets up for a nice buying opportunity down at the $1300 level. Honestly though, I would be a bit surprised if we made it down that far.

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.