- During the trading session on Wednesday, we saw the gold market go back and forth, showing signs of choppiness.
- That being said, it’s not a huge surprise considering how bullish we were previously, and therefore it does make a certain amount of sense that we would have to see a little bit of digestion of the gains.
- After all, markets do not go straight up in the air forever, so I think it does make a bit of sense that the market would take a bit of a breather here.
Technical Analysis
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The technical analysis for the gold market is obviously very bullish, as the 50 Day EMA is all the way down at the $2800 level. It is not until we break down below there that I would even consider that the uptrend in the gold market could be struggling and perhaps even changing. Even then, I think it would come down to what’s going on around the world.
The $2900 level is also supported, as is the $2850 level. If we can rally from here, I suspect that the market will eventually try to get to the $3000 level, an area that is obviously important from a large, round, psychologically significant standpoint. If we can hit the $3000 level, I think that there will be a lot of people out there willing to take profit, and it is possible that it could end up being a massive “ceiling in the market”, at least temporarily. That being said, I don’t think that you should be shorting the gold market just because we hit the $3000 level, rather I think it just might be another pause, but that is something that remains to be seen.
In general, I think this is a situation where gold will continue to be bought on dips, as has been the case for quite some time. However, we could enter a bit of a consolidation range, as the market has rallied rather significantly over the last several months. That of course would be normal as well, and not necessarily bearish.
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