By FXEmpire.com
The gold markets had a massively bullish session on Thursday as the market shot up over $35 an ounce. The market has been massively bearish as of late, and this bounce would have been expected sooner or later. In fact, just yesterday we stated that there was a real shot at seeing it during the Thursday session, and that we would go long on a break of the highs from the Wednesday doji.
The markets seem to be focusing on the possibility of the Federal Reserve easing again. The last FMOC minutes suggested that the committee was ready to step in and ease if economic conditions warranted it. The situation in Europe is one danger that Mr. Bernanke has mentioned in the past, and as the region looks to be getting worse – there is a sense that the next round of QE is only a matter of time.
However, this is probably a bit premature as the situation isn’t quite there at the moment. The areas above feature a couple of large resistance areas The first area that we are eyeballing is the $1,640 level and this is our first target for longs. Even though we feel the market will eventually rise to loftier levels, the area will more than likely push prices back down, and with the market being so volatile, we are happy to take profits at this area.
If we do manage to break above that area, the $1,680 level will more than likely be the next target, followed by $1,700 and $1,800 as well. The market for gold is still strong in the end as far as we are concerned, but we think that after the $1,640 level is reached, the market will fall again. This should have us looking for more opportunities to buy at lower prices again, especially as we get back to the $1,550 level. Supportive candles on the pullback will also be a reason to buy going forward. The selling of this market isn’t a thought until we close below the $1,500 level as it is out “line in the sand”.
Click here a current Gold Chart.
Originally posted here
