Gold markets fell pretty hard during the trading session on Thursday, as the US dollar gained strength against most G 10 currencies. Quite frankly, the US dollar had been oversold so this should have happened anyway.
Gold markets continue to show a lot of tight trading in this general vicinity as the $1750 level has offered too much in the way of resistance. That being said, I see a lot of support underneath, extending all the way down to the $1690 region, which coincides quite nicely with the 50 day EMA that so many traders like. With all of that being said, I do think that this pullback is going to be a nice buying opportunity as the gold markets have been extraordinarily strong as of late. We had recently broken out of a symmetrical triangle, and we may now come back down to test it. If we break down even further, perhaps down to that 50 day EMA then it certainly looks a lot like a rectangle.
Gold Price Predictions Video 22.05.20
In either situation, consolidation or then continuation is typically the move. Beyond that, we have central banks around the world printing currencies and plenty of headline risks out there that could come into play. In other words, there are a whole multitude of reasons why this market may continue to go higher of the longer term, but that does not mean that it will do it in a straight line. The $1750 level is obvious extreme resistance, and one would have to think that if we can ever break above the $1800 level the gold market should shoot straight up in the air much like a “beach ball being held under water.” As far as selling is concerned, I have no interest in doing so at this point but will let you know if that changes.
This article was originally posted on FX Empire
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