Gold plunged during the early hours on Monday to reach the 50-day EMA, showing signs of negativity. That being said, this is still a very positive trend in the market, and at this point, I just don’t see how you would sell gold to try to short it anytime soon. I suspect that most of the downward pressure is simply people collecting their profit. This is a market that has been very strong for some time, and as a result I think this is a situation where you need to understand that there is an opportunity to get ‘cheap ounces of gold’ on this move.
The 50 day EMA could offer a bit of support, but even if we break down below there, then I think you need to pay close attention to the $2,600 level. We don’t really have a scenario right now that I think is conducive to shorting the gold market because although the geopolitical part of it is probably going away now that Trump has been elected, the reality is that the gold markets were moving on, bonds and economic concerns, spending, that kind of thing.
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So put it all together, I do think eventually gold goes higher, but right now it just looks like it’s digesting some of the gains and perhaps trying to entice more buyers. I’ll watch the 50 day EMA, and if we can bounce from here, then so be it, I’d be a buyer again, but if not, then I’ll be watching again at the $2,600 level.
Source: Fxempire
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