Gold markets have been struggling lately, and this Tuesday was no exception. The area around the 50-Day EMA has been offering a lot of technical resistance, causing gold to fall hard during the trading session. This has led to a situation where gold may try to reach down towards the 200-Day EMA, an area that has recently seen some support. The strength of the US dollar has also played a significant role in gold's struggles, as a strong dollar tends to lead to weaker gold prices.
If there is a rally from the current level, the $1860 region has proven to be a difficult area to breach, and above that lies the $1900 level, which has seen significant selling pressure. While there is still some hope for a rebound, it is important to note that reestablishing the uptrend may take some time, and we may see a choppy situation in the near future.
One major factor to keep in mind is the upcoming speech by Jerome Powell, who will be speaking in front of Congress. This is likely to have a major influence on the bond market, which in turn affects interest rates and the value of the US dollar. Given the current uncertainties surrounding monetary policy, it is unlikely that things will get simple for traders anytime soon.
It is worth noting that the 50% Fibonacci root level sits just below the 200-Day EMA, right at the psychologically important $1800 level. A breakdown below that level could spook a lot of gold bulls and could be the next major move if gold continues to struggle. While this is not a certainty, it is important for traders to recognize this as a real threat.
- It is important to keep an eye on both technical and fundamental factors when trading gold.
- With the speech during the session, we could see some fundamental factors come back into play.
- While there may still be some hope for a rebound, it is important to recognize the challenges that lie ahead as there are so many important technical levels.
- Traders should be prepared for a choppy situation, as well as the potential for a breakdown below the $1800 level.
Risk management and position sizing should be a top priority when trading this market.