Gold Technical Analysis
The gold market has rallied a little bit during the early hours on Thursday as we continue to see a lot of noisy behavior in general. The market is hanging around the $4,000 level, which is an area that is obviously a large, round, psychologically significant figure, but it’s also an area that traders have been looking at for some type of solution to the overbought condition. We’ve been going back and forth, and it does suggest that perhaps the froth is being worked out over time. The 50-day EMA being broken to the downside could open up a bigger move down to the $3,800 level, which was the target of the ascending triangle that we had broken out of previously.
If we take off to the upside, market participants could open up a move to the $4,200 level, and I think that would be bullish, but I also want to see it done in a slightly controlled manner, maybe even a slow manner, since the last thing you want to see is another impulsive move. You can get exhausted much quicker that way and lose quickly in a massive drop.
I think we are on the precipice of a bigger move, and of course, we’re at a point of inflection, so be cautious. But as things stand right now, I certainly don’t want to short this market. And if we do take off to the upside, then maybe, just maybe, we can get back to $4,200. Otherwise, we may just go sideways for quite some time and try to stabilize things.
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