The gold market gapped a little bit higher during the trading session on Monday here, pulled back a bit to finish filling that gap, and then turned around. Now it looks like it’s ready to try to grind higher. The $3,500 level above is the top of the range that we have been in, and I will be watching that very closely. If we were to somehow break above there, then I think that’s extraordinarily bullish for gold.
And I do expect that to happen given enough time, but I don’t expect it to happen quickly. We are in the middle of summer, and unless there is some type of external pressure applied to the market, it’s very difficult to get aggressive on gold at this point, mainly due to the fact that the volume will just be anemic overall. And we are essentially doing everything we can to just try and work off some of the previous excess froth.
I do like the idea of buying gold on dips. So, I am watching this closely and I do think that the 50 day EMA near the $3,337 level, I think could be a little bit of a floor in the market in the short term. But even if we were to break down below there, we could drop as low as the $3,200 level and still see some value being played out there, as it is the lower part of the larger range. I’m bullish longer term, but I recognize we just don’t have the momentum right now.
Source: fxempire
