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Christopher Lewis
Gold

Gold markets rallied a bit during the trading session on Monday, breaking above the 50 day EMA quite decisively, but gave back those early gains to form a less than impressive candlestick. This suggests that gold still has further to go to the downside and quite frankly if the US dollar strengthens, that will be the main reason. While we have seen this market drift lower over time, I do not necessarily think that gold is something that you should be selling, because quite frankly there is a lot of risk out there and that is of the way gold works.

Gold Price Predictions Video 20.10.20

To the downside, the $1850 level is an area where we could be seen a certain amount of support in the future, and it does make a decent target if you were in fact to short the gold market. However, I do not think that shorting is the best way to go as the longer-term fundamental certainly do look like they are going to be good for gold. Below the $1850 level, we have the massively important $1800 level which has previously been the scene of a major breakout, and it is more than likely going to be an area where we see a bit of “market memory” come back into play.

Beyond that as well, we have the 200 day EMA which is approaching that level. It is because of this that I think somewhere between $1800 and $1850 we will find the buyers return into this market to continue the longer-term uptrend. I do not like trading against the overall trend, so I am perfectly content to simply look for value in gold and take advantage of it slowly, building up a bigger position as the market extends gains.

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

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