(MENAFN- Daily Forex)

• Gold gapped lower on Friday to show signs of hesitation in what would have been very thin electronic trading.
• After all, the Americans were not there because of the Independence Day holiday, and that takes a huge amount of liquidity out of the market.
• For that reason alone, I don't read too much into the candlestick, but what I do pay attention is to how the market is trading overall.

At this point in time, we continue to see a $300 range with the $3,200 level underneath being support and the $3,500 level above being resistant. We are basically in the middle of that and sitting just above the 50 day EMA. So, I think this is a very neutral market. If you were a short-term range bound trader, you probably like gold here, but ultimately, I think that longer term traders are waiting for value to get involved yet again.

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A little bit of pullback goes a long way as far as value is concerned, and that is something that you should keep in mind. Traders around the world are watching the Federal Reserve and expect them to cut rates, but the question is, are they going to cut sooner rather than later? Right now, most of the bets are on the month of September. However, economic indicators out of the United States continue to look fairly strong, at least stronger than anticipated as far as employment is concerned. So, we'll have to see how that influences the Federal Reserve. Central banks around the world are collecting gold anyway, so that puts a little bit of a bid in this market.

EURUSD Chart by TradingView

But at the same time, you can also put the counterpoint that geopolitical tensions are starting to calm down a bit, at least, at least in the Middle East. And that takes some of the risk premium out. In other words, and in short, I think this is a market that stays in this range. This is no different than looking at a five minute range. You want to sell at the top, buy at the bottom, or as I prefer, generally speaking, we have been in an uptrend. So, I like to buy dips and sell somewhere towards the middle or maybe closer to the top, waiting for an eventual breakout. I do think we get that breakout. I just don't know how long it's going to take as we don't really have a catalyst at the moment.

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