Gold markets exploded to the upside during the week, showing significant momentum to the upside. The $1520 level will offer quite a bit of resistance based upon the previous break down, and I think there is a major battle just waiting to happen. A pullback from here should see plenty of support underneath at the $1500 level though, but it is probably easier to trade this market from the daily timeframe or perhaps even the four hour timeframe. If you are a longer-term investor though, gold does look as it is ready to go higher given enough time, but the next week or two might be a bit of back-and-forth chopping due to the lack of volume.
Gold Technical Analysis Video 30.12.19
The bounce from the 38.2% Fibonacci retracement level is a good sign as well, as it was the massive resistance barrier that we broke out of the ascending triangle. All things being equal, the market will probably go looking towards the highs again, not only based upon geopolitical concerns but also the central banks around the world continuing to keep the monetary policy very loose. The size of this candlestick is something to pay attention to, but we are bit overextended to look for little pullbacks to take advantage of as it will offer value and what is obviously a very bullish market. If we were to turn around a break down below the $1450 level, then the market will more than likely collapse, but I do not see that happening anytime soon. We are building up pressure to the upside so therefore it’s only a matter of time in my estimation.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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