The gold market was a bit soft in the early hours of Monday, as we continue to see a bit of profit taking. However, there is still a major uptrend to pay attention to, so this simply means we are waiting for an opportunity.
Gold markets initially did try to rally a bit during the trading session on Monday in the early hours, but it looks like we’re going to dip below the $2,400 level again. That’s really not a big deal because the market has been choppy for a while and maybe got itself a little overdone. Nonetheless, regardless of what happens in the next day or two, I do think that gold has plenty of support underneath. And therefore, I’m looking for some type of bounce to take advantage of. The 50-day EMA sits right around the $2,355 level and is rising. Somewhere between here and there, I would expect buyers to come in and pick up cheap gold.
After all, this has been a fairly reliable uptrend, but it was pretty noisy before. You could, to a point at least, suggest that maybe you have a little bit of a channel trying to be formed here, as we have seen a lot of back and forth over the last couple of months. So, we’ll see how this plays out, but you can clearly see an uptrend line. The question is, does the top of the channel hold or is it just simply a series of higher highs? It’s still a little early to tell.
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But both would tell you the same thing, and that’s that over the long term, gold should continue to perform. It doesn’t mean we won’t pull back a bit, and that’s exactly what we are seeing. Watch the US dollar that will have its say as well, but also keep in mind, there’s plenty of geopolitical risk out there that could be a boon for gold, if you think about it. So, at this point, I’m just patiently waiting for an opportunity to start buying again.
Source: Christopher Lewis FXempire
