The gold futures markets were closed on Friday, but that does not mean that there is not a lot to learn from the charts. The $2050 level was a massive selling pressure area, and we formed a massive top in that area. If we pull back from there, the market might go to the $2000 level, It is a psychologically important number and an area where we may see buyers return. Even if we do break down from there, it’s likely that we might see a pullback to the $1975 level.
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Despite the noisy behaviour, there are plenty of people who are betting on the Fed cutting rates. If this happens, then it makes quite a bit of sense that gold will continue to go higher, as investors think that the US dollar will continue to go lower. In addition, the market is witnessing a lot of wealth preservation sentiment at the moment, which makes gold an attractive investment option. However, it is important to note that even if the US dollar rises, gold prices can still rise.
Looking into the future, it looks likely that we will eventually take off, but it is not going to be easy. It will take a lot of effort. As a result, there will be a lot of volatility ahead. After the massive move higher, we are starting to see a lot of volatility, as we got stuck around the $2000 level. If we pull back from here, there will be plenty of buyers interested in gold.
In fact, many experts believe that gold can continue to go higher. There are a lot of reasons for that. Including the ongoing COVID-19 pandemic, which has created a lot of uncertainty in the markets. In addition, geopolitical tensions and inflation fears have made gold a popular choice for investors looking to preserve wealth. As a result, we might see gold prices continue to rise over the coming weeks and months.
However, there are still risks when trading gold. One of the main risks is the possibility of the US dollar advancing. If the US dollar gains strength, it might put pressure on gold prices, as investors flock to the greenback as a safe-haven asset. Additionally, a stronger economy might lead to higher interest rates, which might also put downward pressure on gold prices.
