Gold fell again on Tuesday, as we continue to see a lot of traders heading away from the metal markets at the moment. That being said, we are approaching a massive support level below.
Gold
Gold has fallen a bit during the trading session here on Tuesday as we continue to see a lot of volatility and noisy trading.
Ultimately, I think this is a market that you need to be very cautious with, but it does look a lot like a market that has plenty of support underneath it, especially near that large $4,000 level. That’s an area that I think a lot of people will be watching closely, as it has been supported multiple times in the past.
Looking at this chart, I think it’s obvious that we are in the midst of trying to determine whether or not we are going much higher or much lower. If the market breaks down below the $4,000 level, then we could see another $500 loss to send the gold market down to $3,500.
Technical Outlook and Key Support Levels
To the upside, I see the 200-day EMA offering a significant amount of resistance, and really at this point, I suspect more than anything else we may see just a bit of consolidation between the 200-day EMA above and the $4,600 level below.
With that being said, I like the idea of buying dips longer term, but we don’t have any momentum to think that it’s a buy-and-hold situation yet. I think buying the dip, playing a quick bounce, and then going from there is probably how I’ll deal with this.
But again, if we break down below $4,000, then we may have to reset. I think gold goes higher over the longer term, but in the meantime, the strengthening US dollar is by far your biggest problem.
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Christopher Lewis is a technical analyst and market commentator at DailyForex with more than two decades of trading experience in Forex and other leveraged markets. Based in Columbus, Ohio, he specializes in chart-based analysis of major currency pairs, stock indices, commodities, and energy markets, focusing on clear support and resistance levels, trend structure, and risk management. Christopher produces daily written and video analysis for traders who rely on technical setups to navigate volatile market conditions
As seen on: Pairs Of Aces Podcast,The Trader Guy, FXEmpire
