The gold market rallied ever so slightly in the early hours on Monday as we continue to see a lot of back and forth trading, but overall, we are still very much in an uptrend. I think at this point in time, it’s more likely than not that we are simply working off some excess froth and trying to grind away between now and the US elections as well as the Federal Reserve interest rate decision, both of which will have a major influence on gold. For that matter, we also have an Australian interest rate decision and a British interest rate decision.
So, a lot is going on this week that could have a bit of an influence on gold, but clearly the elections and the Federal Reserve are the two biggest things. From a technical analysis standpoint, the $2,700 level is worth watching. It’s a large round, psychologically significant figure that previously has offered a little bit of support over the last week or two, so it’s not a real stretch to think that it would do it again.
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If we do break down below there, then we get the 50 day EMA, which is right around $2,640, and then eventually the $2,600 level. I have no interest in shorting this market, it’s just simply far too strong, and therefore I think you’ve got a scenario where the market will eventually try to return to the $2,800 level. And then once it breaks above there, it could very well go to the 3,000 level. There is literally nothing on this chart that makes me think that shorting gold is a good idea.
Source: fxempire
