By FXEmpire.com
The gold markets continued to look a bit buoyant during the Tuesday session as the market pulled back, only to bounce again. This shows that the gold markets continue to be supportive, and that there is a fair amount of traders out there that could buy this market up. The action has been a bit choppy in general, but the general direction is constantly up it seems.
The $1,640 level above has been an area that the bulls can’t seem to get over, but the recent action certainly looks as if it has the ability to get up there. The last couple of writings by us in the gold markets have been suggesting that we like buying on dips, and with the last couple of sessions, you can see why. The market simply doesn’t “want” to go down. It almost resembles a beach ball being held under water, you feel that it will eventually burst through the surface.
We are long term bulls of gold in the first place. However, we have to admit that the gold trade has been difficult over the last several months. The fall has been pretty strong, but now that we are so close to the massive support at $1,500 we think the bulls will start to reassert themselves on the market again.
If the market can manage a daily close above the $1,650 level, we feel that it will continue much higher as the natural trend in this pair has been positive for so long. The market will be a choppy one though, as the inflation outlook isn’t all that strong at the moment, but there is always going to be a chance of further stimulus form various central banks. Needless to say, if the Fed starts to ease, the gold markets should skyrocket.
The selling of gold can’t be done until we break below the $1,500 level in our opinion. The market will be a “buy on the dips” market in the meantime, and we see value in the gold markets at the moment as the market certainly has been oversold.
Click here a current Gold Chart.
Originally posted here
