The gold market initially pulled back just a bit during the trading session on Monday, but then turned around to show signs of life again. All things being equal, this is a market that continues to pay close attention to the twenty five hundred dollars level, which is a large round psychologically significant figure. And it looks like the market is going to continue to see an attempt to get back to the $2,525 level. The area above that has been like massive resistance for this market.
Short-term pullbacks continue to get bought into and quite frankly, they should be considering everything that’s going on in the world. Keep in mind that gold is getting a little bit of a boost by interest rates dropping because it makes paying for storage for large amounts of gold a little bit more palatable when bonds aren’t giving the same type of interest rate return. Furthermore, you have central banks around the world buying gold, such as India, China and Russia. And then of course, beyond that, we have plenty of geopolitical risk.
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So, all of this leads to higher gold pricing given enough time. Beyond that, technically speaking, we’re still very much in an uptrend, so there’s no point in trying to fight that either. So, with all of that being said, I have no interest in shorting this market, and I think that every time it pulls back, it gives you an opportunity to pick up cheap gold. The 50-day EMA underneath near the $2,450 level is now in the short-term floor theme. So, with all of that being said, I remain very positive about this market.
Source: FXempire
