Gold looks like we are trying to go to the upside and clear the $1750 resistance barrier. If we can get above that area on a daily close, that is a good sign that we are going to see a continuation to the upside.
In fact, that is essentially what I am waiting to happened in order to start buying.
We are now challenging the 50 day EMA, a technical indicator that a lot of traders will pay close attention to. With that being the case, I think it is very normal the pull back we have had on Friday, clearly, we have a fight on our hands.
I think gold is in the midst of trying to figure out whether or not it is done selling off or if we are going to go much lower. Right now, it does look like the buyers are trying to make a bit of a move into the market, or perhaps some short selling has finally been covered. Either way, it looks as if we are trying to bounce but this is a market that still needs to “prove itself.”
All things been equal, it is likely that the market rising will have to do with yields in America dropping and of course the US dollar softening at the same time. If that happens, it is a little bit of a boost for gold and should send this market much higher. At that point, I would become more bullish of gold, as it will have formed a bit of a “double bottom”, and that of course is a great reversal signal. This is a market that I think continues to see noisy behavior so the one thing that you will have to be cautious about is the position size of your trade, because I would anticipate that occasionally we could get the noisy reaction to the bond markets and inflation expectations in the United States and beyond. It is worth noting that as long as that double bottom holds, there is hope for higher pricing.
In fact, that is essentially what I am waiting to happened in order to start buying.
We are now challenging the 50 day EMA, a technical indicator that a lot of traders will pay close attention to. With that being the case, I think it is very normal the pull back we have had on Friday, clearly, we have a fight on our hands.
I think gold is in the midst of trying to figure out whether or not it is done selling off or if we are going to go much lower. Right now, it does look like the buyers are trying to make a bit of a move into the market, or perhaps some short selling has finally been covered. Either way, it looks as if we are trying to bounce but this is a market that still needs to “prove itself.”
All things been equal, it is likely that the market rising will have to do with yields in America dropping and of course the US dollar softening at the same time. If that happens, it is a little bit of a boost for gold and should send this market much higher. At that point, I would become more bullish of gold, as it will have formed a bit of a “double bottom”, and that of course is a great reversal signal. This is a market that I think continues to see noisy behavior so the one thing that you will have to be cautious about is the position size of your trade, because I would anticipate that occasionally we could get the noisy reaction to the bond markets and inflation expectations in the United States and beyond. It is worth noting that as long as that double bottom holds, there is hope for higher pricing.