Monday’s trading session witnessed a modest increase in the price of gold as global events continued to be highly volatile. Ultimately, the gold market attempted to reach $1,750, as it has done numerous times in the past. The 50-day exponential moving average (EMA) above continues to drift downward, which I believe will present a bit of a shorting opportunity.
Monday’s trading session resulted in a slight depreciation of the U.S. dollar, so you should pay close attention. This prompted gold to increase, but I honestly believe it’s only a matter of time before sellers enter the market and push it down. Nonetheless, one could also make an argument for a “double bottom” underneath. If we are able to break above the 50-day exponential moving average, then it is probable that we will see a larger move. Ultimately, the $1800 level may also be a target with the 200-day exponential moving average.
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Ultimately, this will depend on the U.S. currency and interest rates, as a strengthening of both would be negative for gold. In recent times, the negative association has been particularly high, so bear this in mind. If you intend to trade in this market, you must closely monitor the 10-year yield and the US Dollar Index. If we were to reverse direction and break below the $1680 mark, it would raise the likelihood of a severe breakdown at that time.
