- The gold market has plunged initially during the trading session on Thursday, but it still continues to see a lot of noise, as we are trying to find some reason to continue the upward trajectory.
The gold market has plunged initially during the trading session on Thursday, but it looks like the $4,800 level is in fact trying to hold things together. The $5,000 level continues to be very difficult to break above from a longer-term perspective. Ultimately, you have to look at this as a market that is simply trying to find its footing.
Because of this, volatility would be expected to go forward. I do think $4,800 is very important because if we break down below there, then it is very likely that we test the 50-day EMA down at the $4,600 level, which quite frankly after the price action we have seen might be healthy.
If we can get a daily close above the $5,000 level on Friday going into the weekend, that is a really bullish sign.
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Geopolitical Influences and Market Stability
The biggest problem we have is a lot of what is moving the gold market at the moment is geopolitical, and that is something that could change over the weekend while you cannot adjust your position. You need to keep that in mind.
I don't have any interest in shorting gold at this point. It is still an argument of when I buy it on dips, maybe giving me a potential value trade. With this being the case, I think you have to look at this through the prism of a market that is in a strong uptrend. It got way ahead of its skis, and now we are simply trying to find some stability so we can continue what we have been doing for quite a while.
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