- Gold has rallied nicely during the Thursday session, but really, at this point, we have to pay close attention to this market.
- Although we have shown a bit of bullish pressure with the $4,200 level offering a potential floor, all things being equal, this is a market that I think continues to be noisy.
- After the last couple of days have been nasty selling, the market is likely to continue to see a little bit of hesitation.
Any signs of exhaustion, I think it jumped on, and we could send this market down to the $4,000 level. Breaking above the $4,200 level would, of course, really drive home the idea that we are going to continue going higher. But what I am concerned about at the moment is the fact that we have lost so much over the course of a couple of days that it really starts to look like it could potentially be the top of the overall trend.
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Obviously, if we were to break above the $4,400 level, then it wipes out all of the negativity, and we go much higher. I think best best-case scenario is a market that might go sideways for a while, right around the $4,200 level, which might be a nice opportunity to simply digest the gains, which I think is part of what we need to do.
If we were to drop from here, watch the $4,000 level, it'll be crucial as it is a large, round, psychologically significant figure in an area where I think a lot of options traders will be. If we break down below there, then the market will probably go looking to the 50-day EMA. Expect a lot of noise in this market because everybody is writing me emails in order to try and get the next hot tip. In other words, everybody's involved in this. That's typically when we're getting closer to the end than the beginning. But again, we have to see how this plays out. Under $4,000, things get really dangerous for the bulls. Above 4,200, hopefully, we can stabilize. That keeps the trend intact.
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