Gold markets went back and forth during the week, testing the $1450 level for support. It did find that support there, and now it looks as if the back and forth is starting to form a rather supportive candlestick. The $1450 level was the top of the previous ascending triangle, so we do have precedents for market action there. In fact, I think that the market will continue to see plenty of buyers in that area but if it was to give way and go lower, that could be very negative. Keep in mind that the market struggling at this point is probably due to more of a “risk on” type of move, perhaps something involving the United States and China.
Price of Gold Video 18.11.19
To the other side of the equation, the fact that we have pullback like this suggests that we have digested some of the gains, but what concerns me is that nasty candlestick from the previous week. At this point, if we can break above the top of the candlestick for the week, then I would be a bit more comfortable buying here. Otherwise, the market probably chops around and then tries to break down. Quite frankly, the silver market looks horrible so that may be something to pay attention to as well as the two markets tend to move in the same direction. For me, it’s obvious that we are about to make a serious decision, and if it’s below the $1450 level, that is going to be very bearish. However, if we break to the upside and can even take out the candlestick from the previous week, that would be extraordinarily bullish at that point.
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This article was originally posted on FX Empire
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