- Gold markets have initially pulled back a bit during the trading session on Thursday but turned around to show signs of life as we continue the overall volatility in this market.
- The $1680 level above has previously been significant support, so therefore market memory should come back into the situation, resisting show signs of a continuation.
- At this point, any time we see some type of exhaustion in that area, I will be more than willing to short this market.
Keep in mind that the US dollar continues to work against the value of the crypto markets and the risk assets around the world. At this point, I think it’s probably an opportunity to start shorting gold again at the first signs of trouble, but in the short term we may have a little bit of a recovery ahead, just since the US dollar is overbought. If we break down below the bottom of the candlestick for the trading session on Thursday, then that obviously would be very bearish as well. Keep in mind that we had recently broken through the crucial $1680 level, and that is an area that has been supported more than once over the course of the last few years, and with that being the case it’s likely that the market has further to go.
Looking for Opportunities
At this point, I think it’s likely that we could go to the $1500 level, which is a large, round, psychologically significant figure. That area probably causes a little bit of a bounce, but even in a time, I suspect that we probably see this market drop down to the $1200 region, which is essentially a “measured move” of the massive “M pattern” that we can see on the weekly chart.
It’s not until we break above the 50-Day EMA, that I would even remotely consider buying this market. Even then, I’d have to see a pivot by the Federal Reserve or a sudden sharp selloff of the US dollar in general to make this useful. As we rally, I’m looking for signs of opportunity, as the US dollar continues to act like a wrecking ball against almost everything. We are in a downtrend, and that continues to be the case.
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