Gold markets had been forming a bit of a rising wedge, but we’ve broken above the top of it during the session on Wednesday. It looks like the gold market is going to continue to try to go higher, but we may have a little bit of noise in the short term, as we await the FOMC Meeting Minutes, and the jobs number on Friday. We are clearly in an uptrend, and I think it is likely that we are going to see value hundreds on short-term pullbacks.
Bullish Pressure
I do believe that the $1800 level will be a significant amount of support, assuming that we even get down there.
- The uptrend line in the wedge sits just above there, so I think it all comes together in order to offer plenty of buying pressure.
- We also have 50-Day EMA breaking above the 200-Day EMA, forming the so-called “golden cross.”
- That is a longer-term bullish sign, as it suggests that the buyers are looking to “buy-and-hold.”
- I don’t necessarily think that’s the best signal to take, but it does give you an idea of the overall attitude.
- I like the idea of buying short-term pullbacks to show signs of support, followed by bullish pressure.
If we break above the top, then it’s possible that we could go to the $1875 level, which was resistance previously. Breaking above that level then opens up the possibility of a move to the $2000 level, but I think that’s more or less going to be a long-term target for 2023.
On the other hand, if we were to break down below the $1800 level, then we could go down to the moving averages underneath. That should offer a significant amount of support, so if we were to break the role of that, then I think the bottom falls out in the gold market. I don’t expect to see that happen, because most people are worried about protecting wealth right now.
While the US dollar and the interest rate markets have a negative correlation of gold most of the time, it’s not set in stone, so don’t get worried about that necessarily as the market seems to be breaking those correlations at the moment.
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