- The gold market has rallied slightly during the trading session on Thursday as we wait for the Core PCE numbers in the USA.
Christopher Lewis here taking a look at the gold market. The gold market has rallied slightly during the trading session here on Thursday as we continue to hang around the crucial $5,000 level. Quite frankly, the more sideways we go, the better off it is for the market because we had had a major traumatic experience a couple of weeks ago on a Friday where the gold market just got absolutely slammed and then it did have some follow-through on the following Monday.
Since then, we have been bouncing around and that's good. That means that we are starting to get our feet underneath us and it's possible that the longer-term uptrend could continue.
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Building Demand Amidst Geopolitical Tension
That being said, I am very cautious about jumping in with a huge position, but I do like the idea of buying short-term dips as the 4,800 level is an area that I will be looking closely, especially now that the 50-day EMA is racing to it. Underneath there, we have the 4,600 level and the uptrend line.
To the upside, we have 5,150 offering resistance. Anything above there opens up a move to the 5,500-level given enough time. Keep in mind that there's a lot of geopolitical risk out there, so that has given a little bit of a boost to gold. And of course, we have central banks around the world fairly loose with their monetary policy, with a few notable exceptions like Australia.
As a result, I think you will continue to see a certain amount of demand for gold. Beyond that, you have a nice trend, and these markets do tend to trend for very long periods of time. This is a market that has been very robust with the exception of a couple of candlesticks since the middle of August and really, I don't see any change in attitude. I do not have any interest in trying to short this market and we would have to drop below at least $4,500 to even begin that conversation.
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