Gold Market Technical Analysis
Gold markets have gone back and forth during the day on Monday as we continue to dance around the 200 Day EMA. At this point, the market is trying to figure out where to go, especially as the 50 Day EMA sits just above and is falling. Ultimately, this is a market that needs to figure out where it is going longer term, and it could be determined by external factors. The US dollar strengthening will have a negative effect under most circumstances, but what you need to be even more cognizant of is what rates are doing in America.
If the bond market starts to see higher rates, that could drive money away from gold again, as we had seen last month. Ultimately, you need to think about the idea of storage. If you can earn a yield by simply holding paper, becomes much cheaper than trying to store gold in a vault.
If we were to break about the 50 Day EMA, that opens up a move to the $1900 level, and then possibly as high as the $2000 level. That would be a very choppy and strong move, but I would not expect some type of massive momentum with it. This is a scenario where we would see a lot of back and forth, meaning that you should have plenty of time to buy on the dips if that does in fact be the case. You could make an argument for a bullish flag at the moment, but we need a breakout to the outside to see momentum carry gold higher. Underneath, the $1800 level continues to be the “floor” in the market.
Gold Price Predictions Video 31.05.22
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This article was originally posted on FX Empire
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