Gold markets continue their major consolidation
If the gold market were to top it would be extraordinarily bullish.
Gold markets rallied significantly during Tuesday’s trading session to again show signs of strength, in what could be seen as an area of potential consolidation from a broader perspective.. What I mean by that is that we rebounded from some significant lows near the $ 1770 level, and sure enough we saw a significant amount of resistance near the $ 1830 level. When I look at the chart it suggests that we may have an ongoing fork that we’re probably going to hang on to, which of course is worth keeping in mind.
Looking at the moving averages, you can see that the 50-day and 200-day EMA indicators sit at the $ 1,800 level, an area that has a bit of psychology attached to it. The fact that they’re both flat tells me the market isn’t ready for a bigger move, as that usually means we’ll just be going back and forth. That being said, we need to pay attention to a few obvious levels in order to place trades. Having said that, I think what we have is a situation that a lot of traders are going to look both ways in this market, and so if you are careful enough then it is likely that we will continue to see a scenario where a lot of traders are related to the range are likely to be attracted to this market. All things being equal, this is a market that in my opinion continues to experience a lot of fluctuations, so really at this point it’s likely we’ll continue to see a lot of back and forth, but at the end of the day it’s a market that you have to be a little careful about because once we finally get a breakout it’s going to be pretty big.
It should be noted that the candlestick was very strong for the session, suggesting that we may be looking at a scenario where the buyers start to step in and become aggressive. For what it’s worth, we also saw the 10-year yield drop a bit during the trading session as it looks like it’s trying to cap. If it did, it would be extraordinarily bullish for gold.