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MENAFN- Daily Forex)
- The gold market pulled back a bit during the early hours on Thursday after initially trying to rally.
- There was a significant sell off during the Asian session, but it also looks as if there are buyers underneath that are willing to get involved.
- It's really should not be a huge surprise, because the market has essentially gone straight up in the air for several sessions in a row.
- Sooner or later, people will be looking to collect profit on such a strong trade.
Technical Analysis
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The technical analysis for this gold market is very bullish, and the negativity that we saw on Thursday has done nothing to change this. After all, the market has plenty of support levels underneath to give potential buying opportunities for those who are looking to get involved in this longer term uptrend. The first level that I look at closely as the $3000 level, because it is a large, round, psychologically significant figure, and an area that would obviously attract a lot of attention.
After that, I'd be paying close attention to the area near the $2900 level, because it is basically where the top of the bullish flag sense, and I think you would have traders looking at that as a potential entry in order to take advantage of the technical set up. Speaking of the bullish flag, according to the so-called“measured move”, we should be looking at gold going all the way up to the $3300 level, although I'm the first to admit that it could take quite some time to get there.
EURUSD Chart by TradingView
There is no scenario that I can see at the moment that I would short the gold market, but I also recognize that could change depending on geopolitics, and of course central bank action. As things stand right now, it looks like most central banks will be looking to loosen monetary policy sooner rather than later, and if that's going to be the case, that certainly helps the gold market.
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