Gold markets rallied a bit during the trading session on Friday, reaching towards the 50 day EMA. The 50 day EMA of course is a major trend defining indicator. At this point, we are trying to break above there, reaching towards the downtrend line which is the top of the down trending channel. At this point, the market looks very likely to have major resistance from there, mainly because of not only a structural situation, but also the fact that the $1500 level and it psychology comes into play there as well. In other words, it’s going to be very difficult for gold to crack that level but if it does, it would in fact be a very bullish sign.
Gold Price Video 16.12.19
To the downside, there is a massive amount of support near the $1450 level, which is a large, round, psychologically significant figure in of course the top of the perceiving ascending triangle. Because of this, it’s likely that we will continue to see some effort in that area to cause this market to bounce. In the short term, I believe that we simply go back and forth in this general $50 area, trying to figure out where risk appetite goes next. There seems to be a lot of confusion out there right now, but with the Federal Reserve stepping away from cutting interest rates, that one major catalyst in the favor of gold has disappeared and perhaps that’s why we continue to see a bit of softness right now. Pay attention to the US dollar, because gold will typically move inverse of that currency.
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This article was originally posted on FX Empire
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