Technical analysis of the gold markets
The gold market has pulled back a bit in the early hours of Monday as we are still seeing a lot of noisy behavior, but I do think the market has become a bit overloaded at the moment and that is very likely the biggest problem. . After all, we still have plenty of reasons to believe the gold market is going to rise, including things like rising tensions in the Middle East, falling interest rates around the world, central banks around the world buying gold, and then, honestly said, just the technical analysis and the trend of the market itself.
Momentum alone should drive this market higher given enough time, but momentum can only sustain a market for so long before people need to take profits, and I think that’s essentially what they’ve done here. A move below the USD 2,600 level could lead to a decline towards the USD 2,530 level, where the 50-day EMA currently resides, and this should provide significant support. Either way, I think a pullback is necessary in the short term, but I also think it’s an opportunity.