Gold markets initially fell a bit during the trading session on Tuesday, only to turn around and show signs of life again. By doing so, the market looks like it is trying to recover and bounce a bit to break above the 50 day EMA.
The 50-day EMA, of course, is an indicator that a lot of people will pay close attention to, and breaking above that opens up the possibility of a move toward the $2,740 level. Anything above that level then opens up to the $2,800 level. There are a multitude of reasons for gold to go higher, the first one of course being simple momentum. We’ve gone pretty directly straight up in the air for several months now.
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But beyond that, we also have to keep in mind that there are a lot of geopolitical concerns. I think a lot of the selling from the Monday session probably correlates quite closely to Israel and Lebanon agreeing to a bit of a ceasefire that probably took some of the geopolitical premium out. However, let us not forget there’s a country called Russia, which has a pretty sizable army that’s in a hot war with Ukraine, which is backed by NATO.
So, there are still a lot of things to think about out there. And I do believe the gold will continue to be a large portion of quite a few different portfolios. Short-term dips, I think, continue to be buying opportunities. And the volume has been fairly steady. So that’s actually a good thing. It means that we could probably keep up this momentum over the longer term. Indonesia, India, Russia, and China are all known to be buying gold at the moment through their central banks, so that obviously has an influence as well. At this point, it is a buy on the dip market.
Source: Fxempire
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