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Christopher Lewis
Gold

Gold markets initially tried to rally during the trading session on Wednesday but found resistance above the $1800 level. By turning around to form a negative candle the way we have, it does offer the idea of value underneath and I think a lot of traders will be looking towards this area for an opportunity to pick up “cheap gold.” There were good PMI numbers coming out during the day, and perhaps that is part of the reason we suddenly went “risk off”, but at the end of the day not much has changed.

Gold Price Predictions Video 02.07.20

Furthermore, the thing that you should be paying attention to is that the central banks around the world are continuing to loosen monetary policy, and that is a main driver of the gold markets, as fiat currencies get hammered traders out there will typically go looking towards the gold markets for safety. As fiat currencies get devalued, it lists precious metals overall. Beyond all of that, the market is likely to see an extension given enough time, and once that happens, we are likely to go looking towards the $2000 level.

The 50 day EMA underneath is massive support, so I think that even if we do break down further, I think there is plenty of support waiting to happen in of course we also have the $1700 level which is crucial. That is an area that is a large, round, psychologically significant figure and is the scene of major support. For me, that will be the “floor” in the market.

For a look at all of today’s economic events, check out our economic calendar.

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