The gold market has gone back and forth during the last couple of sessions and Monday was no different. As we continue to hang around in this general vicinity, the market is likely to continue to see more or less a buy on the dip type of behavior. I have been paying close attention to the $2,680 level. It was previous resistance, and it should now offer support on some type of pullback.
I like the idea of looking for some type of value on a short-term pullback, but I also recognize that the market is going to remain very noisy and very difficult at times. There are plenty of reasons to think that perhaps traders will continue to pick up gold every time it drops mainly due to the fact that there are so many geopolitical issues at the moment that it’s difficult to imagine a scenario where people won’t find some type of need for protection.
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Furthermore, we have central banks around the world cutting rates and that has a major influence on gold as well. Finally, we have major central banks around the world, in the Asian region at least, buying gold. So, you have a big buyer, and then beyond all of that, the technical analysis is so strong that anytime gold pulls back, you have to think that it is offering a little bit of value that you can take advantage of.
It’s your job as a trader not to go insane every time it pulls back and get in there with a huge position. Steady as she goes, we’ll win the race here. I believe that we are going to go looking to the $2,800 level. And then after that, it opens up the $3,000 level.
Source: Fxempire
