The 200-day exponential moving average (EMA) and the downtrend line have exerted a small amount of technical resistance on gold markets during Monday’s trading session. At this point, a great deal will depend on whether or not we can take off to the upside, but with the US dollar surging as it has throughout the day, it makes a lot of sense for gold to face some pressure. Nevertheless, pay close attention to the interest rate market, since if rates begin to fall again, gold will benefit.
If you are able to trade XAU/JPY, gold in yen terms has been one of my favorite trades. However, it is also important to note that the market has been generally positive, even versus the U.S. dollar. If a new high is reached, I believe gold will test the $1,800 mark. However, if prices reverse and break below Monday’s trading session lows, the 50-day exponential moving average (EMA) becomes a potential target.
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I believe the one thing you can count on is a lot of choppy and noisy behavior, and you should also bear in mind that this week is Thanksgiving in the United States, which will have a significant impact on volume, as well as when the futures markets are open. As a result, the following few of days may be rather calm, as traders focus mostly on vacations.