- Gold markets have been back and forth in a fairly quiet session on Friday as it looks like we are trying to stabilize after a significant pullback.
- In fact, the recent pullback has been more like a collapse as interest rates continue to be stronger than anticipated in the United States.
- That causes some issues for gold. The US dollar strengthening on the back of that also puts more downward pressure, but all things being equal, you have to look at this through the prism of a market that is trying to do everything it can to find support.
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The Thursday candlestick was a hammer, the Friday candlestick looks like it's going to be somewhat neutral, so it is a start. We don't necessarily have momentum yet, but this is the beginning of turning things around. If the market were to take the $2,600 level on the next candlestick or two, then that could be a sign that the market could go back towards the $2,800 level. The $2,800 level was an area that a lot of people had paid close attention to due to the fact that it was yet another large round psychologically significant figure and an area where we are more likely than not to see a lot of options traders.
As long as we can stay above the $2,500 level, there's still a chance that gold will bounce. But right now, it looks like a market where you want to sit and wait to see some type of bounce so that you can take advantage of any type of momentum that picks up in this market. It's worth noting that we just tested the 50-day EMA, broke through it. We tested the $2,600 level and then broke through it. But now we're at the 50% Fibonacci retracement level. So it'll be interesting to see if that finally slows down the descent.
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