(MENAFN– Daily Forex)
- gold markets have done very little during the trading session on Friday, as we are hanging around the $1930 level.
- At this point, the market looks as if it is getting a little bit tired, and quite frankly I think it’s only a matter of time before we get a pullback which I believe offers a lot of value.
- After all, this is a market that has been bullish for quite some time, but we have gotten a bit overdone at this point.
- The $1875 level could be an interesting area, or perhaps the uptrend line underneath.
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I think that given enough time, the gold market will probably go looking to the $2000 level, which is a large, round, psychologically significant figure, and an area that previously had been important. The $2000 level will attract a lot of attention, but ultimately, I don’t know that means anything other than a bit of psychology coming into the picture.Sooner or Later, we will run out of Momentum
Pullbacks now will be potentially attracted to value hunters, and people like me who are more swing traders. It’s difficult to chase this type of momentum, and even though it’s very likely that we are going to see a significant pullback, the reality is that the idea of shorting this market is a bad one, to say the least. All things being equal, the 50-Day ema is sitting just below the uptrend line, which has been important multiple times. The market has been in its uptrend for a while, so sooner or later we will run out of momentum.
A lot of this comes down to wealth preservation, and not necessarily interest rates, so I would not worry too much about the bond market. After all, gold started to rally long before interest rates cool down drastically, so this is a situation where we are probably paying attention to the US dollar more than anything else as it has cooled off. Regardless, this is a chart that’s obvious, and there’s no need to try to get too cute with this as you should have plenty of opportunities to pick up value given enough time. At this point, patience is the name of the game, and therefore waiting for more value is probably going to be the best way going forward, and that means lower prices.
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