The gold market initially plunged during the early hours on Tuesday but has found enough buying pressure underneath to keep things somewhat afloat. With that being said, the market is still very bullish, and I think it remains very much a buy on the dip type of scenario. The market will continue to be very noisy and that makes a certain amount of sense, considering that we have central banks out there willing to step in and buy gold. And of course, we have the trade war dispute that is a never ending headache for traders.
The overall trend has been bullish, so momentum itself favors an upside move in gold. But I also recognize that you have a situation where, quite often, what you have is just simple trend following coming into the picture as well. We are, I believe at least, somewhat in consolidation at the moment, with the $3200 level offering a floor and the $3500 level offering a bit of a ceiling. As we are directly in the middle of this, I suspect we’ve got choppy trading ahead.
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I still favor the upside, so I think dips will continue to be opportunities. But I also recognize that we just don’t have anywhere to be right now. And with CPI coming out on Wednesday, Tuesday may end up being a somewhat quiet session. Ultimately, I do think we will reach $3,500. I just don’t know what the reason will be yet. We will get that catalyst and continue.
Source: Fxempire
