Markets stabilize for the third day in a row
The US dollar has a direct negative correlation with this market, so it is very likely that we will see the US dollar falling as a sign to start buying gold.
Gold markets did very little during Tuesday’s trading session as we continue to dance around the $ 1,781 level. It’s still a good sign, because at least we’ve stopped falling, which is the first step in some form of recovery. It should be noted that the level of $ 1750 below should be favorable, due to the fact that this was previous resistance. However, a certain amount of “market memory” comes into play and that would be an area that a lot of people would pay attention to.
If we were to fall below the $ 1,750 level, it could open up even more sales, possibly hitting the double dip which is just below the $ 1,700 level. The market has seen a lot of buying in this area, but it certainly looks like we are looking to move down there if we can break through that next support barrier. On the other hand, if we turn around and cross the 200-day EMA threshold, which sits at the $ 1,811 level, then the market will likely try to close the gap which extends to around $ 1,860 in the -above.
The US dollar has a direct negative correlation with this market, so it is very likely that we will see the US dollar falling as a sign to start buying gold. The question now is whether or not we can overcome this gap.
If we manage to break the spread then it is likely that we can turn to the $ 1910 level, which was the most recent high level. If we do manage to break through that level, the market is likely going to turn to the $ 2,100 level, which is an area where we have seen the market hit recently, and I think that would be the longer term goal for those which are very bullish on gold. That being said, if the market falls below the double dip below the $ 1,700 level, chances are we could go all the way down to $ 1,500.