(MENAFN- Daily Forex)
- Gold markets went back and forth Wednesday as we continue to levitate just below a major supply area.
- Because of this, the market is likely to continue struggling, and the fact that the Friday session is the Non-Farm Payroll announcement probably throws even more noise and nonsense into the market.
- Given enough time, I think this is a market that will have to make a major decision rather soon.
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One of the major drivers of this market is the bond market, and what yields are doing. The 10 year yield did spike over the last couple of days, but it appears as if it is trying to fall back down. If that is in fact the case, that will be bullish for gold, but we have to worry about the $1800 level above as a major barrier. The $1800 level has historically been supported, so“market memory” could come into the picture, especially as the 50-day EMA is slicing through it. With that being the case, I think it's worth noting that the candlestick for the previous session was a shooting star, and although we have recovered a little bit during the trading session after initially falling on Wednesday, it's hardly a confidence-inspiring candlestick.
If we break down below the $1750 level, then it's very likely that we will test the $1725 level next. After that, then we would be looking at the $1700 level. Notice that we did bounce from the $1680 level recently, which is an area on longer-term charts that has been important more than once. Because of this, I think what we are getting ready to see is a potential breakdown if that were to be violated. Granted, it will take quite some time to get there, and of course we have the jobs number between now and then to get things moving, but you should probably keep this in the back of your mind due to the fact that we have seen so much in the way of noisy behavior recently.
As far as taking off to the upside, we would need to see the US dollar lose strength, yields in America drop drastically, and this market break above the $1815 level in the futures market, or the $1805 level in the spot market.
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