- During the trading session on Thursday, we saw the gold market grind sideways, as we continue to see just above the crucial 50 Day EMA.
- This is a market that’s basically in the middle of the overall range, as the $3200 level has been a floor, and the $3500 level above is a ceiling.
- With that being the case, the market is essentially where I would expect to call it “fair value.”,
Because of this I suspect that the market will continue to try to work off some of the excess froth from the previous shot higher, and right now I think there are so many moving pieces in the economy it’s difficult to get overly aggressive one way or the other.
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External Factors
The biggest problem right now is that there are a multitude of external factors right now causing a lot of chaos in the gold market, and more importantly, a lot of uncertainty. After all, the Federal Reserve is still somewhat slow to cut interest rates, and of course we have to worry about geopolitical factors that continue to be a major issue. The tariff situation has not calmed down, and that of course will continue to cause a lot of big moves in the bond markets, the US dollar, and then by extension the gold market. I have no interest in shorting this market, and I do think that if we pull back from here, it’s likely that we will see plenty of “value hunters” looking to pick up cheap gold.
If and when we finally break out of the range, the implied “measured move” is for $300. I suspect it’s probably more likely that we break higher than lower, but I would stick to that forecast in either direction. Ultimately, the market has been in an uptrend for several years and I just don’t see why it would change to a bearish market anytime soon.
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