- Gold initially rallied during the trading session, but it has had some fairly lackluster action during the day as we attempt to sort out where to go next.
- I think at this point in time, we need to pay close attention to the $3,280 level because if we break down below there, we could lose another $80 pretty quickly.
- At that point, we would be threatening the $3200 level, an area that I'd be interested in, as it's shown itself to be supported, and has the 50-day EMA currently hanging around it.
Furthermore, I would also take a look at the fact that historically speaking, it's already acted as both support and resistance, and I think a certain amount of market memory is to be found there. On the other hand, if we turn around and break above the $3,370 level, I don't see much to keep us from going to the all-time highs.
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Don’t Forget the US Dollar
The US dollar has been strengthening a bit and that could be playing a little bit of havoc with gold, but we'll have to wait and see. Bond markets of course continue to be a major problem for a lot of traders, and we'll have to determine whether or not traders feel safe or if they are concerned about the global economy.
There has been a lot of damage done to the overall sentiment until recently due to the trade war. So, I think this remains a very noisy market. But when you look at it, the one thing that you cannot argue with is that there is a significant amount of momentum to the upside over the last several months. So, I'm still a bit leery of shorting this market, even though I can see that it's possible that we draw from here. It's really not until we break down below the $3,000 level that I look at this as a concerning situation. And even then, you probably have the 200 day EMA in that neighborhood as well. So again, I'm just looking for buying opportunities.
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