- Gold markets have gapped higher to kick off the trading session on Thursday, but it's worth noting that we gave up quite a bit of the early gains.
- This suggests that the market was a little overdone, and we should continue to view the $2000 level above as a significant resistance barrier.
- The longer-term charts indicate that the $2000 level has been challenging to overcome, at least for any type of sustained move.
The market is likely to remain noisy as we determine whether we can continue to move higher or see a resurgence in the US dollar, which looks oversold at this time. The candlestick for the trading session on Thursday suggests that the market is running into hesitation, and we could see a little bit of a pullback. The $1950 level underneath could offer some support, as it is a round figure and an area where we have seen some support in the past.
However, if we were to break down below that level, the $1900 level could be targeted, and the 50-Day EMA sits just below it and is rising. This is an indicator that many traders pay close attention to, and it could offer some technical support. On the other hand, taking out the shooting star from Monday could open a significant move to the upside, allowing the market to take off.
Dips Should be Viewed as Potential Buying Opportunities
In this scenario, dips should be viewed as potential buying opportunities in the short term. The current market conditions highlight the importance of closely monitoring market trends and economic indicators while adapting investment strategies accordingly. Gold markets are traditionally very volatile, and investors must be prepared for potential losses while seeking opportunities for gains.
Looking at the overall geopolitical concerns around the world does make a certain amount of sense that gold will continue to attract inflow since so many traders will be out there looking to protect their wealth. If the US dollar suddenly strengthens, it could cause a little bit of short-term negativity. Nonetheless, both gold and the greenback can go higher at the same time as we saw in the 1980s.
Any negativity at this point is probably more or less a function of gravity and not necessarily some type of major change in attitude but be cognizant of that 50-Day EMA underneath as a bit of a guide.
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