- Gold markets have initially fallen a bit against the backdrop of a very choppy and sideways market.
- All things being equal, the gold markets have been very choppy over the last 4 to 5 sessions, which makes a certain amount of sense considering just how bullish and overall erratic behavior that we have seen.
- In general, this is a market that I think is probably heading into some type of hesitation or consolidation pattern, which is actually good for the buyers as well as everyone else, because it means that the market might be trying to build up enough momentum down the road to continue going to the upside.
Multiple Factors Drive Gold
Multiple factors at this point in time will be driving gold going forward, not the least of which of course will be the geopolitical concerns around the world, and of course the overall tariff situation, it does make a certain amount of sense that gold will remain attractive. While we did form a nasty shooting star for the weekly candlestick last week, the reality is that this is a market which is almost impossible to get short of. With that being the case, I look at this as either “killing time”, or a potential set up for an even deeper pullback.
If we get a deeper pullback, the $3200 level is an area that I think a lot of people would be paying attention to as it is a large, round, psychologically significant figure, and an area that previously had offered a fairly significant amount of resistance. The 50 Day EMA is sitting at the $3100 level and rising, so it’ll be interesting to see if this can keep up. Ultimately, this is a market that I do think will try to get back to the $3500 level, which is where we had the most recent swing high and of course the all-time high. In general, I think that we not only get back there, but I think we eventually break through there. This does not necessarily mean that it has to happen overnight.
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