Gold markets rallied a bit on Wednesday to show signs of life as we have broken above the $1930 level. At this point though, we still have a lot of noise just above and we have to pay close attention to what is going on. If we can break above the $1950 level, then it is likely that the market can pick up the necessary momentum to go much higher.
Underneath, we have the $1920 level offering support that extends all the way down to the $1880 level. This zone of support continues to be crucial, and it is worth noting that we have respected it quite well over the last several days. Because of this, I do think that it is probably only a matter of time before we get a move to the upside, but that does not essentially mean it has to happen right away. We may simply go sideways for a while and wait for an opportunity to build up a position before rallying.
The 50-day EMA is currently at the $1895 level and rising, so this does suggest that we are going to continue to see a lot of support come back into the picture, and of course the 50-day EMA has a certain amount of influence as well, so that would give us yet another reason to think that buyers would be involved. However, if we were to break down below the $1880 level, gold markets could collapse at that point.
It is worth noting that the longer that we stay in this range, the more bullish it will be as the overall comfort of the market in this region will continue to build up. We have had a very vicious pullback, but in general, this has been a very bullish market and it should continue to be as we worry about inflation and risk appetite around the world. The war going on in Ukraine and the concerns about the global economy also drive the gold markets higher. Ultimately, this is a market that I think will go looking towards the highs again and will continue to see plenty of buyers. I have no interest whatsoever in shorting until we break down below the $1880 level.
