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While it may take some time to get back above recent highs, there is no interest in shorting this market anytime soon.
- The XAU/USD currency pair experienced a significant drop in value during Monday’s trading session, as interest rates in the United States rallied.
- This led investors to turn towards the US dollar, putting pressure on the gold market.
- However, this may have just been an excuse for the market to correct itself, as it had previously rallied too far.
While the $2000 level has a lot of psychological significance and offered significant resistance, it’s not necessarily a sign that the bullish attitude towards gold is over. If the US dollar were to lose significant strength, it’s likely that this step down in gold’s value would be seen as a potential buying opportunity.
Additionally, there are other factors that suggest gold will continue to experience buying pressure, such as potential wealth preservation and uncertainty around the world. Central banks have also been buying gold heavily, providing a floor in the market.
Investors will be paying close attention to the $1900 level and the 50-Day EMA indicator just below it. While the market has been overextended, it may take some time to work off this excess by either pulling back significantly or spending time moving back and forth. If the market were to break out above recent highs, it could quickly go up to the $2050 level or even $2100.
It’s important to note that there is no interest in shorting this market anytime soon, but it may take some time to get back above the significant resistance level. A sudden explosive surge in gold’s value is unlikely without some kind of fundamental reason. Ultimately, the next real reason we get to see gold go higher, we will probably start to see more “FOMO trading.” The gold market is rather volatile under the best of circumstances, so it does make quite a bit of sense that we would see big moves eventually.
At the end of the day, while gold has experienced a significant drop in value due to rallying interest rates in the US, this may have just been a correction in an overextended market. Investors will be paying close attention to the $1900 level and the 50-Day EMA indicator, and there are several factors that suggest gold will continue to experience buying pressure. While it may take some time to get back above recent highs, there is no interest in shorting this market anytime soon.
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