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At this juncture, I think we’ve got a situation where we see quite a bit of volatility, but I don’t know if this is a complete recovery or not.
- Gold markets initially fell during the trading session on Friday, but then turned around to show signs of life again as the 38.2% Fibonacci level has offered support, as it looks like we are trying to do everything we can in order to find our footing.
- Keep in mind that gold has sold off quite drastically as of late, but it is probably worth noting that the market is also at the 38.2% Fibonacci level, which of course typically attracts a certain amount of attention.
- That being said, the market has also seen a little bit of resistance in this area previously, so I think it’s more likely that we are going to see a lot of back and forth.
Buy-and-Hold Trading
The 200-Day EMA is sitting near the $1800 level, so I do think that has a certain amount of importance attached to it. The 200-Day EMA will typically attract a lot of systems traders, and therefore a lot of longer-term “buy-and-hold” type of trading. If we were to break down below it, that opens up the possibility of a pretty significant pullback to the $1750 level. That being said, pay close attention to the $1900 level, because we formed a lot of inverted hammers in that area, so therefore I think a lot of people will be looking at that as potential resistance. Breaking above all of those would be an extraordinarily bullish sign, and therefore I think you have the possibility of a move to go back to the highs again if that does in fact happen. If it does, then I think gold will finally make a serious run toward the $2000 level.
That being said, you can see that we have broken down quite drastically from the high, showing 2 massive red candlesticks. The 2 massive candlesticks suggests that something changed in that area and moves like that very rarely happen in a vacuum. It doesn’t mean that we have to respect it, just that more likely than not it would cause a lot of noise. At this juncture, I think we’ve got a situation where we see quite a bit of volatility, but I don’t know if this is a complete recovery or not.
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