Gold markets rallied initially during the trading session overnight in fear of a global slowdown as Beijing released poor trade balance numbers, but as the Americans released a very bad jobs figure, gold suddenly found more money flowing into the market. At this juncture, we are testing the 50 day EMA, an area that is always going to cause a bit of technical questioning.
The $1300 level is in the neighborhood as well, so would not be surprising at all to see a little bit of a pullback. We have filled a gap in this area, but I do think that we have a good chance to go higher based upon what we seen over the last several days. After all, we had seen a precipitous fall in the Gold markets, only to see the next few days be very quiet and sideways, and now we’ve seen the impulsive move back to the upside.
I believe that the $1275 level underneath is a major support level, so if we were to break down below there it would change everything. At that point in time I would anticipate a move down to the $1250 level, $1225 level, and then eventually the $1200 level which has been the bottom of the overall consolidation for some time. My base case scenario doesn’t feature this though, and I suspect that we are going to go towards the $1225 level above, testing the bottom of that trend line that we had just recently broken.
