Gold markets initially dipped on Wednesday but turned around to show signs of strength again as the central banks around the world continue to flood markets.
Gold markets have rallied quite nicely over the last couple of days after initially plunging, and this is something that should be taken stock of. After all, this is a market that has been in an uptrend for some time, so it does make quite a bit of sense that we would see buyers jump in and pick up gold as it is getting cheaper. Furthermore, we have tested the 50 day EMA which is a technical level that a lot of people will pay attention to, so that of course is worth paying attention to as well. Ultimately, I do think that the uncertainty out there also bodes well for gold longer term, so it does make sense that we go looking towards the $2000 level.
I believe that there is supported not only at the 50 day EMA but also the $1900 level. This is your first “line of defense” for the buyers. If we break down below there, then it is likely that we go down towards the $1800 level where I would expect even more buying pressure. Currently, this almost looks as if it is a bit of a “rounded bottom” from the recent pullback, and of course with all of the uncertainty out there it is not a real stretch think that people may be buying gold to protect their portfolios.
By Christopher Lewis, Sep 09, 2020, at 03:31 p.m.