Gold markets pulled back slightly during the trading session on Thursday as we continue to grind around the $1550 region. The market is forming a bit of a bullish flag, so that is something that’s worth paying attention to, and it has most certainly been very bullish as of late. The 50 day EMA is starting to reach towards the $1525 level, and therefore I think that will continue to be massive support.
Gold Outlook Video 17.01.20
What’s even more interesting is that we have formed a couple of hammers on the way down, showing that there are at least buyers out there willing to step in and try to support this market. That tells me that there is still a lot of underlying demand for gold, and that it is only a matter of time before we bounced and start going to the upside. The $1600 level above is an initial target, but if we can clear that level then it’s very likely that the gold market will go looking towards the $1800 level based upon longer-term charts.
To the downside, if we were to break down below the 50 day EMA, we will test the $1500 level which in and of itself should have a certain amount of psychological importance based upon it. Underneath there, I would anticipate even more support at the $1450 level, as it is where we had bounce from previously and it is the 38.2% Fibonacci retracement level. All things being equal though, I do think that we continue to go much higher, but we obviously need to pull back a bit in order to find enough value.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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