The gold market had initially fallen a bit during the trading session on Wednesday, only to turn around and bounce from the crucial 50-day EMA.
We bounced back over the $2,400 level yet again, and therefore, I think it does make a certain amount of sense that it continues to look positive. After all, the gold market has a lot working for it, not the least of which would be the fact that the geopolitical concerns out there remain quite elevated. And then of course, we have the whole idea of market participants paying close attention to central banks.
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If rates are in fact going to go lower around the world, that does make gold a little bit more attractive. Furthermore, there’s just a lot of volatility out there and gold is a place to hide. Keep in mind, gold got sold off the last couple of days due to the idea that the hedge funds out there and other funds will have to sell what they have gains in to cover some of their other losses. Remember, it was across the board.
Typically, that means there’s forced liquidations, maybe in another market, and here you’re trying to collect your profit in the gold market to cover those losses. That’s generally what happens in these environments. That being said, it does mean that typically the uptrend continues, and let’s be honest here, there’s a lot to push this market higher.
Source: Christopher Lewis FXempire
