XAUUSD Forecast: Gold Markets Continue to Reach for Support
If we do break down even further, notably below the 50 Day EMA, the $1900 level should offer a significant amount of support as well. In that scenario, I think it is probably only a matter of time before the market would go looking to reach the 200 Day EMA. That is essentially the $1855 level, an area that we had broken out of previously.
This would be a huge move to the downside, so I do not necessarily think that is the most likely scenario. If we turn around and rally, it is the $1970 level that will be important, and a breach above that allows the market to go looking towards the $2000 level. While we are still very much in an uptrend, it must be said that the price action on Thursday will have left quite a bit to be desired.You will notice that over the last couple of months we have been trading in the same basic consolidation area, so therefore it is not a huge surprise to see that the market has come back to it.
Pay attention to interest rates in America because they are starting to offer “real yields”, which does not bode well for gold most of the time. If yields continue to rise in America, that could cause major problems for this market. The market turning around and smashing through the $2000 level could signal that we are going to all-time highs again, but we have seen a lot of negativity thrown on this market during the last 24 hours.
Whether or not we can turn things around remains an open question, but one I suspect we will see answered rather quickly. Make sure to keep your position size reasonable.
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