Gold markets absolutely fell apart during the Wednesday session as traders continue to run towards the US dollar in general. The long-term outlook for
Gold markets absolutely fell apart during the Wednesday session as traders continue to run towards the US dollar in general. The long-term outlook for gold is still strong, but it has become obvious that the support in this market has failed on all levels. With this in mind, we are not willing to buy it at all currently. The $1,600 level was the “bottom” of our “buy zone”, and it has been seriously violated. The $1,500 level still looks as possible support, but in this environment we aren’t overly excited about stepping in front of this freight train.
The markets in general are in a sell off mode, and all things risk related or commodity related is getting sold off en masse. The gold market will ultimately get a boost by uncertainty, but currently people are selling first and asking questions later. In this kind of environment, it is prudent to step away from the market, and with the end of the year in sight – the action could possibly become more exaggerated as the volume will certainly dry up.
The market will need to find support near the larger round numbers such as $1,500 for us to get excited about buying again, and in order for us to consider it a decent show of strength, we need to see several days of stagnation around one of these large area. Until then, we simply do not trust this market as it certainly has come completely undone at this point in time. As long as the EU is still front and center, the US dollar could continue to give commodities in general all kinds of problems. Because of this – we are flat of this market as we simply haven’t seen enough supportive action recent to even consider going long, and the longer-term trend is decidedly up over the last ten years, which makes us leery about selling at all. The bounce that we could see near the larger zones could be massive, and as such – we are hopeful for gold buying in the near future as the move has been so overdone.
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.