Gold Prices July 28, 2016, Technical Analysis

The gold markets initially fell during the day on Wednesday, but turned around to form a slightly positive candle. By doing so, it looks as if we are trying to turn things back around and continue to go higher. After all, the gold markets have been very bullish as of late, and a break above the $1300 level was a significant move higher. With that, the market should continue to find that level as the “floor” as it continues to be a beacon of the uptrend. At this point in time, it looks very likely that the market is going to try to reach towards the $1375 level. With this, any pullback should end up offering “value” going forward, as the market continues to look very attractive to traders around the world.

After all, even though the US dollar has been climbing, the reality is that they are running towards the US dollar in favor of safety, not necessarily anything else. Safety is one of the things that people will buy precious metals for, especially from other countries as they want to dump Euros, and find some type of security and wealth protection in hard assets as the concerns of the European Union and of course the United Kingdom leaving that region will continue to have people nervous. This of course translates into the United Kingdom itself, and quite frankly quite a few Third World markets. Gold can often be used as a store of value, and with that being the case it’s likely that we will continue to see both the US dollar and the gold markets rising the same time.

In fact, if you have the ability to trade gold in other currencies, you may see better returns buying gold in those currencies as they are much softer than the US dollar right now, with perhaps the exception of the Japanese yen. Ultimately, that has a bit of a “knock on effect” in the gold market, and should continue to help the futures market right along. At this point in time, I believe that we will reach towards the highs, and then eventually break above.

With all of this being said, what currency would you prefer to trade gold against, and do you see $1300 as the “floor” in this market as I do?