- Gold markets drop during the trading session on Friday after initially trying to rally, as the jobs report in the United States came out a little hotter than anticipated.
- This had the US dollar strengthening, because it does suggest that perhaps the Federal Reserve might wait a while to cut rates, and therefore it had a little bit of a negative influence on gold.
Recently, we have been consolidating in this market, and I think that remains the case despite the fact that it was a somewhat ugly short-term move. Ultimately, the market has been bouncing around $3500 above, and the $3200 level below. The 50 Day EMA is near the $3250 level and rising, and I think that it will end up being a potential short-term floor in this market.
Technical Analysis
As you can guess, I think that the market is essentially going sideways at the moment and is not sure where it wants to be over the next few weeks. However, I think that in the longer term we are still very bullish of gold, at least as long as we can stay above the psychologically important $3000 level. The $3000 level is much lower than where we are at the moment, and it is now starting to attract the attention of the 200 Day EMA, which is a longer-term trend indicator. If we were to break down below that indicator, then I think a lot of people would get really short of gold. However, right now we are light years from that happening, so that’s just something that I have in the back of my head, not necessarily something that I am willing to bet on.
Short-term dips should continue to be attractive for longer-term buyers, and you could even make an argument that we are in the process of trying to sort out whether or not we can form a longer-term bullish flag. (Full disclosure: I’m not necessarily sold on this idea, and I’m the first to admit that it’s an ugly one.) With that being said, I think there are too many things working for gold right now to bet against it.
Ready to trade our Gold daily analysis and predictions? We’ve made a list of the best Gold trading platforms worth trading with.
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
