Gold Technical Analysis
The gold market has rallied slightly during the early part of the Wednesday session as we continue to see more buy on the dip mentality. All things being equal, this is a market that I do think tries to break back above the $5,000 level and perhaps go looking at the $5,150 level. Anything above that level really gets the market moving.
The occasional pullback does make a certain amount of sense considering that we had just seen a massive amount of destruction in a single day and quite frankly, I think that put a lot of trauma into the market. Trauma being the only word I can think of in context of what happened.
Market Drivers and Support Levels
The $4,800 level, the 50-day EMA, and the uptrend line all come into the picture to offer support and I think it’s probably a scenario where there are plenty of people willing to get involved in gold because of the potential of the Federal Reserve cutting rates, geopolitics, debt, just general uncertainty, and beyond that, it’s just a nice uptrend.
But I also recognize that after that damage that was done, a lot of confidence building will have to be done in this market as well. Keep in mind that we are starting to move in more of a normal type of volatility regime over the last couple of weeks and each day gets successively a little more normal. So, with that being the case, I think this is actually a healthy sign. The question is, can you be patient enough to let this play out?
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