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Gold markets have initially tried to rally during the trading session on Monday but there was a severe lack of liquidity and therefore it makes quite a bit of sense that we would see the markets struggle a bit to gain any real footing. With the lack of volume, I would not read too much into the candlestick but would rather look at the overall last several days as a sign that we are going sideways in general.
Gold Price Predictions Video 01.06.21
The “golden cross” recently happened, and a lot of traders out there like that signal. The 50 day EMA is rising and reaching towards the downtrend line that we had seen the market break out of, which of course also shows quite a bit of upward momentum. I also like the fact that there is a hammer from the previous session on Friday, so that does suggest that there is a certain amount of support underneath as well.
Pay close attention to the US dollar, because if it starts to fall that will help gold rise. Ultimately, the market looks very likely to continue seeing volatility, but given enough time I think that we are probably going to see a lot of chop more than anything else, so I would be cautious about my position size, with an eye on the $1850 level underneath offering support, right along with the previous downtrend line. In fact, it is not until we break down below the $1800 level that I would be a seller of this market, and only if the US dollar suddenly gets quite a bit stronger. At this point, I do not think that is the most likely of outcomes.
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This article was originally posted on FX Empire