What we need to see is some type of breakout or breakdown to truly get aggressive.
Gold market traders continue to get thrown around back and forth as the markets really have nowhere to be. Pay close attention to the US dollar, because it most certainly has a certain amount of influence on gold, and we have the yield situation in America that will continue to be a major driver of where we go next. Gold has been a major dog as of late, and the 50-day EMA above seems to be continuing to offer resistance. Given enough time, we will probably see this market try to take it out if the US dollar falls, and it most certainly did during the session. However, it does not necessarily move at the same time and the same pace, so that is something worth paying attention to.
To the downside, I see plenty of noise out there causing headaches for traders, and I think that we are probably going to see this market be very choppy, and support should be found at the double bottom underneath. The 50-day EMA above should be resistance, so if we get a daily close above that, then I think we would go looking towards the 200-day EMA. The 200-day EMA is a significant indicator that a lot of people would pay close attention to. If we can break above that level, then we are likely to go much higher.
If we were to break down below that little double bottom underneath, that could send this market much lower, perhaps reaching down towards the $1500 level. The $1500 level is a large, round, psychologically significant figure and, as a result, I think that if we test that area there would probably be significant buying in that area as well. If we were to break down below there, then you could be talking about a move all the way down to the $1300 level.
I think that we are going to go back and forth and chop around in this marketplace, as we continue to see a lot of confusion about where we are getting ready to go. The interest rates in America are higher than they once were, but the rate of change is most certainly slowing down. That is something worth paying attention to, so I think what we need to see is some type of breakout or breakdown to truly get aggressive.