(MENAFN- Daily Forex)
gold markets have initially fallen during trading on Wednesday, reaching below the $1730 level before turning around and forming a bit of a hammer. What's interesting is that we are at the very top of the previous W pattern that ended up forming, and therefore a bit of market memory could be coming into the picture. Keep in mind that the FOMC Meeting Minutes come out late on Wednesday, so they could have a little bit of an influence, and it might even be a bit outsized since it's just a few hours before New York shuts down for Thanksgiving.
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Furthermore, keep in mind that the futures markets will be very thin at times, and have limited hours of operation over the next couple of days. The 200-Day ema above could offer bit of resistance at the $1760 level, with the $1800 level above that offering a significant amount of resistance as well. Anything above $1800 will capture the attention of markets around the world, and almost certainly send gold much higher. In fact, at that point, we could even be talking about trying to revisit the $2000 level again, although how long it takes to get there is a completely open question.Markets Remain Fickle
On the other hand, if we turn to take out the bottom of the candlestick for the trading session on Wednesday, we could see this market try to get back down to the $1700 level, which is roughly where the 50-Day EMA currently sits. In that scenario, we could make a serious move down to the $1680 level, which is where we had broken out the previous consolidation. That's also an area that had been massively important in the past, although we have sliced through a couple of times as of late, so its importance may be waning at this point.
Pay attention to the US dollar, because it obviously has an influence on the gold market, as does the interest rate situation in America. It is possible that we are starting to drift away from interest rate questions though, and perhaps start looking towards the idea of recession in general. In that environment, gold could do well, right along with the US dollar so be aware of that possibility. At this point, it certainly looks as if the buyers are trying to make a statement, but markets remain fickle.
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