Gold Technical Analysis
The gold market initially rallied a bit during the early hours here on Thursday but gave back gains to show signs of hesitation. All things being equal, this is a market that I think continues to look at the 50-day EMA underneath as a potential trend line and of course support. So, with all of that being said, I think you have to be somewhat positive in this market overall, despite the fact that markets might continue to see a lot of back and forth, possibly even negative action from time to time.
When you look at the bigger picture, it looks like consolidation after a massive move higher between $3,200 on the bottom and $3,500 on the top. If we can break above that crucial $3,500 level, then gold very well could take off to the upside. And based on the measured move, I’d have a target of $3,800.
On a move below the $3,200 level, then I think you have to look at the possibility of a move to the $3,000 area where I would expect a massive amount of support based on previous action, the psychology of the big figure, of course, and the 200 day EMA racing towards that level. I don’t particularly see that happening, but it is something to keep in the back of your mind. As things stand right now, gold still looks very much like a buy on the dip market going forward, as the market is working off so much momentum at the moment.
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