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Christopher Lewis

Gold markets went back and forth during the trading session on Friday as we tried to discern what is happening next. Risk appetite is all over the place, and of course gold can be a bit of a safety trade, but not initially. Typically, what happens initially is that people rush to the US dollar, which of course works against the value of gold. Eventually they both turn higher, and that might be what we are getting ready to witness. With that in mind, I think that you get an opportunity to pick up gold at cheaper levels, as I see several support levels underneath.

Gold Price Predictions Video 05.10.20

The first support level that I see that comes to mind is the $1850 level. I think this is minor support, but it did work out quite well recently. Underneath there, the $1800 level is much more interesting to me, as I think there is much more support there. The 200 day EMA is starting to come rather close to that level as well, so a lot of things line up nicely at the same time to increase the idea of upward pressure.

Having said all of that, if we break above the highs of the trading session on Friday it is very likely that we go looking towards the $1950 level, which is where the breakdown started. I would assume that there is a lot of supply there, so it is possible that could be the next target. Nonetheless, I do not like the idea of shorting gold, because I think we are in a longer term cyclical trend higher.

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

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