Gold markets have initially fallen during the trading session on Thursday but found enough support near the 200 day EMA to turn around and go positive for the session. It looks as if we are trying to threaten significant resistance, and the form of the $1820 level. If we can break above that level, that would be very good for gold, almost undoubtedly send in an up another $50 rather quickly. That being said, the lack of liquidity is something that you are going to have to pay close attention to, but that might be the very thing that makes that happen. All it would take is a headline or a big order to come through to send the market straight up in the air.
Obviously, that lack of liquidity can work in the other direction, but it seems like there is a lot more work to be done to break this market down. If we break down below the 200 day EMA, then the $1785 level is the next support level, and breaking below that could open up a move all the way down to the $1760 level. I do not think that happens in the short term though, because quite frankly gold has been somewhat relentless in its drive to go higher. Whether or not I would be a buyer right now is a completely different question though, because I do not necessarily want to get involved in a position right here, because I need to see that resistance beaten back.
Part of what you are seeing on the price action is traders squaring their books for the year, so not all of these moves will have anything to do with any trading plan but may just simply be taking profits as we head into the new year. After all, funds and large traders have to report to their clients profits and losses, so that the close out their positions to do so. The real decisions will be made in January when people come back to work, and they decide whether or not there are going to put a bunch of risk on. Gold will be especially sensitive to this, as there are lot of questions in the bond market right now. Regardless, keep your position size reasonable until we can get some type of clarity
