The gold markets initially pulled back during the trading session on Friday but found buyers underneath the turn the market back around. The 200-day EMA is essentially going sideways, which is thought of as a bit of a barrier, and it should be noted that the 50-day EMA sits just above and is trying to reach towards the 200-day EMA in order to form the so-called “death cross.” Keep in mind that a lot of what we have seen here has been negativity as money runs into the bond markets, making gold less attractive as people are using that paper for safety.
There is a major gap above that continues to attract a lot of attention, so if we can break above the 50-day EMA on a daily close, then I think we will go looking towards the $1865 level, which is essentially where the top of that gap is. If we can break above there, then we can go looking towards the $1900 level, followed by the $1910 level. After that, we can recapture the overall uptrend and continue to go towards the $2100 level and beyond.
Otherwise, if we fall from here, we could break down back below the $1800 level, perhaps reaching towards the $1750 level underneath where we had bounced from previously. That is an area that had also been massive support once before and massive resistance before that. It is because of this that I think if we break down below that level it is very likely we will go looking towards the massive double bottom underneath at the $1680 level, which kicked off the entire move higher initially.
I believe that the gold markets are at a rather significant inflection point, and we should see a large move given enough time. I have laid out a couple of different scenarios and am simply waiting for some type of confirmation in one direction or the other to get involved. Yes, it does look quite a bit more bullish all of a sudden, but we still haven't cleared that barrier just above, which is essentially defined by the shooting star on Thursday. Because of this, I am still on the sidelines, but I am looking for a little bit of clarity over the next few sessions.
