By FXEmpire.com
The gold markets fell on Friday as the “risk off” attitude came back into the markets. The Chinese GDP number came out slightly lower than expected, and this spooked many in the markets as China is considered one of the standard bearers for the global economy. If China were to fall into a recession, this would be a massive problem. However, the print was 8.1% – hardly a massive fall in growth.
The gold markets have suffered as the Dollar has risen overall, and lately has been a bit strong. The 50 day EMA is sitting just above the current levels, and it has acted as resistance for the session again. This market seems to be following the 50 for guidance, and as such it is a good moving average to monitor to gauge potential trades.
With this being said, it does look like the grind lower in this market will continue. However, we aren’t happy as sellers in this market, and will continue to either buy or stay flat. We can see quite a bit of support below, and there will be several places where the bulls could come back into the markets in order to push markets back up.
The first level that we see as potential support is the $1,650 level. This is a minor one, but an area that has produced reactions from time to time in the recent past. Because of this, a supportive candle at that level would be reason enough for us to go long.
The $1,600 level will also serve as a market for our upcoming trades. The level is a large round number, and has so far held up the markets. The breaking below of that would have the market looking for $1,500 – and that is our “line in the sand” in this market. As long as we are above that level, we aren’t selling.
On the upside, a daily close above the 50 day EMA would suffice as a reasonable place in which to go long from. The breaking of that average would signal a shift in momentum, and would suggest that we are going higher.
Gold Forecast April 16, 2012, Technical Analysis
Originally posted here
