Gold continues to see a bit of sideways action on Wednesday, as we are basically sitting at the 200 Day EMA.
Gold
The gold market has been pretty noisy during trading here on Wednesday as we are just bouncing around the 200-day EMA, trying to figure out where to go next.
With that, it looks like the market has run out of some momentum over the last couple of trading sessions, and quite frankly, that makes sense because we had seen a gap a couple of times last week, and sooner or later, we have to digest those gains.
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Furthermore, we have to pay a bit of attention to the headlines coming out of the Middle East because, quite frankly, nobody really knows what this memorandum of understanding actually means, and therefore, people don't know whether or not to price in the idea of the conflict in the Middle East ending. I think most people believe that we are a lot closer to it than we once were, but ultimately, it wouldn't take much to kick things back off. And if that's going to be the case, then gold, even if positive, is going to be a little skittish.
Key Support and Resistance Levels
The $4,000 level underneath is a major floor in the market at the moment, and I think if we were to break down below there, it would be a big deal. I don't see that happening, but it is something that could be in the back of traders' minds because if that thing gets broken, then it's likely that we fall apart.
To the upside, the $4,600 level would be an area that a lot of people watch closely, as it should be a bit of a ceiling. Breaking above the $4,600 level kicks off a move to the $4,800 level.
Ultimately, this is a market that I think pulls back a little bit only to find buyers willing to jump in and take advantage of cheap gold.
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