The gold market continues to bounce around quite a bit, as we see the US dollar causing noise.
Gold
The gold market was choppy, to say the least, during the Monday session as we gapped lower, we rallied, we pulled back, we bounced a bit, and now we're all over the place. But the one thing that we are continuing to see is the $5,000 level offers a bit of a magnet for price. The 50-day EMA sits just below, and I think that it offers support as well.
All things being equal, this is a market that I think continues to be bullish longer term, but the US dollar rising has put a little bit of a damper on the idea that gold is suddenly going to take off.
Interest Rates and Market Volatility
Furthermore, we also have the fact that interest rates in America have been rising and if that's going to end up being the case, that means that the cost of storing gold works against it. All things being equal, I think this is a situation where traders will continue to look at this as a market that's probably bullish long term, but in the short term continues to struggle overall.
With this being the case, I think you're looking to buy dips, but you do not get heavily into this market with a massive position because quite frankly, we don't know what the next headline will be and whether or not it will send the market much higher or much lower.
Longer term though, I think that there are plenty of things out there that could continue to put a bid in gold. As long as we stay above the $4,600 level I just don't have any interest in shorting. If we were to break down below the $4,600 level I would probably step away from this market and instead of shorting gold, probably buy the US dollar.
I do think that central banks around the world will continue to hoard gold from everything that I'm reading and of course, we have a slew of central bank decisions this week that could cause more volatility. But before it's all said and done, I look to buy dips for short term rallies.