Gold markets have been all over the place after the FOMC meeting announcement, and even after the press conference. Looking at the candlestick you can see that we still see a lot of uncertainty in this market and therefore I think that we are still possibly looking at some type of pullback. That pullback could offer a buying opportunity as gold is most certainly bullish overall. After all, the Federal Reserve reiterated their desire to liquefy the markets, by flooding everything with the US dollar.
When looking at the technical analysis, the 20 day EMA is above the $1850 level, just as the 50 day EMA is sitting at the $1800 level. Beyond that, there is also a trend line between the two, so I think it is only a matter of time before the buyers get involved. To the upside, the $2000 level is certainly a nice juicy target, and I think we would see a lot of selling in that general vicinity. We have already seen the spot market reached towards that large, round, psychologically significant figure, so it does make sense that it would do the same in the futures market if that does happen.
I think that we will eventually break above the $2000 level, but we cannot simply just jump in with both feet because you could be looking at a $110 pulled back just a reached the trendline. If you are already long in this market, then you are in a position where you can move your stop losses up, in perhaps the possibility that the market continues to go higher in and impulsive move. As far as jumping in here though, you are asking for serious trouble as gold has certainly gotten a bit expensive, at least in the short term. As long as the Federal Reserve continues to throw US dollars into the markets, the gold markets will certainly remain bullish. Even if you told me that the market was going to fall for the next couple of days, I have no interest in trying to get short, I will simply look for signs of support underneath that I can take advantage of as gold clearly is one of the strongest markets out there. If we were to break down below the $1800 level, then we need to have a much more intense conversation, but we are near there quite yet.
