Potential signal
I am a buyer near $5000 with a stop of 4900, and a target of 5350 above.
At this point, it is obvious that the markets continue to be very noisy, as there are a ton of reasons to think that risk will only get more difficult, not less.
The gold market fell during trading on Thursday and we have seen quite a bit of volatility around the world with the US dollar of course causing some issues. Ultimately, I think this is a situation where we are going to continue to see a lot of noise and I recognize that the market is moving on the latest whim and headline, that's out there throwing things around. With the US dollar trying to really strengthen, then I think you have to look at the possibility that the US dollar continues to be one of the biggest problems that gold will face.
Ultimately though I believe that gold still has a place in most people's portfolio with the $5,000 level being important.
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Technical Support and Price Ranges
The 50-day EMA sits just below there, and I think that offers support as well, so any drop from here that gets a bit of a bounce near that area would be a bit of a perfect setup. The $5,500 level above is the top of the overall range and I think if we can break above there then obviously it kicks off a much bigger move to the upside.
If we were to break down below the 50-day EMA, then it's possible that the market could go down to the $4,600 level. With this being the case, I think you have a lot of real estate here that you can cover in the market with the latest headlines and the volatility picking up the way they have. I do think that you will have to be very cautious and therefore your position size is very difficult.
All things being equal is a market that I think you have to be cognizant of the danger of getting too big and you also have to recognize that an errant headline at any time of the day could throw things around massively. Nonetheless I'm still bullish gold and I do think longer term.
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