Tuesday’s trade on the gold market was marred by the release of CPI figures that were twice as high as anticipated. This resulted in an increase in the value of the U.S. dollar, causing gold to decline. The $1700 level is currently a clear support zone that extends to the $1680 level. Breaking below this level then enables additional selling.
The $1750 level continues to act as a big hurdle for rallies, especially when the 50-day exponential moving average (EMA) approaches this level. As a result, I feel this market has only a small probability of rising, which is likely rather limited at this time. If we break above all of that, then $1800 is a possibility, but I would not hold my breath.
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Short-term traders may continue to employ range-bound strategies on short-term charts, as I believe the sole certainty is that price will fluctuate in this region. We must overcome a great deal of inertia, which will most likely afford us the chance to engage in a longer-term transaction. In the interim, though, I expect things to be, to put it mildly, quite volatile, so you should be cautious with position sizing and be available to monitor the charts throughout the day.
In fact, precious metals markets tend to be extremely volatile most of the time, but in current atmosphere where people are attempting to predict the Federal Reserve’s actions, things will be particularly turbulent and negative. In this situation, caution is preferable to bravery.