The gold market has pulled back just a bit during the early hours on Monday, which, of course, is Memorial Day in the United States, so liquidity is a bit of an issue. With that being said, there was electronic overnight trading and futures trading that did have a little bit of an influence, which was negativity. But with that being said, I think we’re going to continue to see from a larger standpoint the market trade between $3,200 on the bottom and $3,500 at the top. All things being equal, I think you’ve got a situation where we continue to go back and forth and every time we dip, I do believe there are buyers willing to get involved.
The 50 day EMA being at the $3,200 level is obviously very bullish as well, at least from the standpoint of offering that as a floor. If we were to break down below there, then the $3,000 level could be a target. If we break above $3,500, which is going to take a lot of effort, then we continue the overall long-term uptrend. That being said, I do think we’re in a state of flux, but most of this probably comes down to the fact that the tariff situation seems to be somewhat going in the rear view mirror of the market, but there are other reasons to believe gold is higher.
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For example, profligate spending by most major nations, and of course, the geopolitical concerns that are still very much a thing out there. And then finally, it’s just the trend, it’s just the momentum. When you zoom out on the chart, you can see that gold is extraordinarily bullish and therefore, you don’t really want to fight a trend like that, at least not until you get some type of fundamental reason to do so. And right now, we just don’t have it.
Source: Fxempire
