The gold markets went back and forth during the trading session on Wednesday as we awaited the Federal Reserve announcement. Even after the announcement, not much was cleared up, as the market simply banged back and forth between the same range that we have been in for a while. Keep in mind that the 200-day EMA above is worth paying attention to as it has offered quite a bit of resistance, right along with the 50-day EMA which sits just above there. With that being the case, I think what we are looking at here is a scenario where we continue to see a lot of sideways choppiness.
When you look at the overall attitude of this market, the $1790 level has been extraordinarily supportive, so I think that the market will be paying close attention to it. If we were to break down below that level, it opens up the possibility of a move down to the $1750 level, an area that has caused a significant bounce recently. If we were to break through there, then it is likely that we could go screaming towards the $1680 level. The level is where we have seen a bit of a double bottom, which will attract a lot of attention.
On the other hand, if we were to turn around and break above the 50-day EMA as well as the 200-day EMA, then it is likely that we could go looking towards the $1830 level, which was the top of the overall range that we have seen recently. If we were to break above there, then I think we will try to fill the gap which could send the market towards the $1860 level. We just do not seem to have the catalyst right now, so I think we are just going to go sideways until we try to figure things out. I think that the gold market will continue to be very noisy simply due to the fact that the interest rate markets are very noisy and choppy as well, thereby causing a lot of indecision in this market as a side effect. Ultimately, I think we need some type of decisive move to follow before putting any money to work.
