The gold market initially fell during the trading session on Monday, but found plenty of buyers near the $5,000 level.
Gold
The gold market initially fell during the trading session on Monday, reaching the $5,000 level. That being said, the market has turned around to show signs of life and now it looks like we are trying to turn things around. The $5,000 level is an area that I think a lot of people will be watching because it is a large round psychologically significant figure and an area that has been very important.
If we can break above the $5,200 level, then it allows the market to go looking to the $5,400 level. I have no interest in shorting gold, but it is interesting that we have seen a lot of noisy behavior and a lot of erratic behavior but there is so much risk destruction out there that it does make a certain amount of sense that gold will continue to have a bit of a bid.
Market Outlook and Position Sizing
That being said, we have also seen the US dollar really skyrocket in some places at one point during the session which also causes issues for gold. If gold were to break down below the $5,000 level one would have to assume it will challenge the 50-day EMA and then after that the $4,800 level.
Ultimately, this is a market that is very noisy and very sideways, but it does have a lot of buying pressure underneath and I think ultimately that is probably what wins the day. So, with this, I am bullish, but I also recognize that you need to be very measured with your position sizing because quite frankly gold didn't perform that well on Monday considering that half the world is falling apart.