It is worth noting that the candlestick for the trading session looks to be somewhat supportive, especially after the candlestick from the Wednesday session. The $1850 level is an area that had previously been resistance, and now looks to be supportive. Furthermore, the downtrend line should also offer support as well.
If we were to break down below there then it is possible that the market could go looking towards the 200 day moving average, which is near the $1800 level. Breaking down below that level then it is likely that we go testing the double bottom. That being said, I do not think that is as likely to happen as it once was, but you have to keep in the back of your mind that is a potential possibility.
For what it is worth, we have to pay attention to the US dollar and of course interest rates in the United States, because if both start to drop, then it is possible that gold will be a major beneficiary. Furthermore, we have a lot of concern out there about Bitcoin, as China has shaken a lot of players out of the market as they are issuing new regulations. Some of the money that had been being used in the traditional safety trade could be going from Bitcoin to the gold market. I do not know that we will ever know if that is true, but it certainly seems to be one of the potential themes.
If we do break out to the upside, then the market is likely to go looking towards the $1900 level, followed by the $1950 level which is an area of significant selling in the past. Because of this, I do think that makes quite a bit of sense that we would try to get to that area, but obviously would take a lot of effort. I think this is going to be more of a grind higher and that is a good thing, as parabolic moves can come crashing back down as we have seen in the crypto markets this week. I would build a position very slowly and only add when the market goes in our favor.
