Gold Forecast Today 08/04: Selling Pressure Mounts (Video)

(MENAFN- Daily Forex)

• Gold futures have been hammered during the trading session on Monday as we continue to see a lot of questions asked about the gold market.
• Not necessarily that everybody is shunning gold at the moment.
• I think it has a lot more to do with the idea that traders out there are trying to cash in any gains that they have to cover for margin calls.

There are a lot of people out there getting blown up with margin calls at the moment and therefore they have to sell their winners. Gold has been a huge winner. So, imagine a situation where you are up 20 % on a massive gold position, but you have major problems with a stock like Nvidia, or your NASDAQ 100 futures are cratering. You close out the gold position and take that money and then cover your margin. That has a lot to do with what's going on at the moment. And then generally speaking, you could say that gold was a little overbought anyway.

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So, at this point in time, I think we have to watch this very closely as we are not only at the crucial $3,000 level, but also, we are starting to approach the 50 day EMA. I do think gold goes higher over the longer term, but this is a major if you will, a major correction that's been needed. And with this being the case, I think you're going to find value. The problem is, do you have enough wherewithal to hang on to the very volatile market? I'm not willing to short gold. I don't know if I'm buying it quite yet. But I am interested in this area.

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So really what the gold market needs is a day or two of stability and that might have more people jumping in. I do think we eventually go higher and based on the bullish flag that we had broken out of previously, there is a measured move to the $3,300 level. We got to the $3,200 level, but now we've retraced enough that I think sooner or later this gets interesting.

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