Gold markets broke down during the trading session on Friday, reaching down towards the $1280 level. That’s an area that seems very likely to offer support, and we have in fact bounced from there during the day. The 20 day EMA is there, the previous up trending channel coincides with that level, and of course it has been horizontal support. That being the case, I think if the US dollar can soften again, we will go looking towards the $1300 level. A break above that level sends Gold markets much higher levels, which is my base case. Even if we do break down below the 20 day EMA, then I think the 50 day EMA will be tested.
Gold Price Video 21.01.19
Overall, I do believe in “buying on the dips”, as the Federal Reserve looks likely to remain on hold at the very least, and that of course will be negative for the US dollar longer-term. That generally lifts gold, and I think it could give us an opportunity to reach towards the $1300 level again. Ultimately, I think that selling is all but impossible now that we have seen this massive move higher, and now it just comes down to finding value. Once we get some type of bounce, I think that money will flow back into this market place, and you should also pay attention to the EUR/USD pair, as it does seem to move right along with this market as they are so highly correlated.
This article was originally posted on FX Empire
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