Gold markets initially dipped on Monday in the spot trading market as well as futures and then turned around to recover. That being said, keep in mind that Monday is also Labor Day in the United States. So, your typical open outcry hours, if you will, in the futures market won’t actually be happening. So, liquidity is going to be an issue.
Nonetheless, we can look at the gold chart and some eyes that we are in an uptrend, and we’ve been consolidating. And of course, the $2,500 level has attracted a certain amount of attention as you would expect, due to the fact that it is a large, round, psychologically important whole number, and would attract a lot of financial press as well. However, it is also worth noting that we have sliced through it a couple of times already.
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There are multiple reasons for gold to be positive, not the least of which would be the idea that the central banks around the world are cutting rates. And then that of course, helps quite drastically for gold to pick up a little bit of momentum. We also have the geopolitical concerns as there seems to be war everywhere and possibly more breaking out at any given moment, so that helps gold.
And then furthermore, we have India and China, Russia and a few other major central banks around the world buying gold. So that of course puts a floor in the market as well. With that being said, any pullback in the gold market will more likely than not be looked at as a potential buying opportunity.
Source: FXempire
