Gold markets have fallen during the trading session on Thursday as we continue to see a lot of negativity in the charge. This is a market that I think will continue to be very noisy, and as we head into the jobs figure on Friday, it does make a certain amount of sense that we may get a little bit of back-and-forth trading.
The previous low, which sits near the $1680 level, is more likely than not going to be an area that’s difficult to get below because it has been a major support level over the last several years, so breaking down below that level will open a “trapdoor” that can send this market much lower. In that trade, we will more than likely see gold plunge towards the $1500 level. The $1500 level course will be a significant round number that a lot of people will be paying close attention to. Because of this, I think it’s only a matter of time before we would see a little bit of “market memory” come into the picture.
Wait for Short-term Bounces to Sell
- On the other hand, if we do rally from here, then I would anticipate that we could see the $1720 level offering a certain amount of resistance based upon “market memory” there as well.
- If we do break above there, the market is likely to see resistance in the $1760 level as well.
- The 50-Day EMA sits just above there and is going lower, so I think that also offers plenty of resistance.
- Short-term bounces will continue to be nice selling opportunities, but I think it’s probably only more likely to be a situation where this will be greatly influenced by the Federal Reserve and interest rates.
With the jobs number coming out on Friday, it’s very likely that we will see a lot of volatility. That volatility will have the market going back and forth and cause quite a bit of a headache if you are not properly sized. With this, I will probably be paying close attention to the market at the close on Friday, because it will give us a good clue as to how people will feel about holding gold into a 3-day weekend. Keep in mind that Monday is Labor Day in the United States, so therefore there will be very limited electronic trading.
Ready to trade our Gold prediction today? Here’s a list of some of the best XAU/USD brokers to check out.