By FXEmpire.com
The gold markets had a slightly positive session for Wednesday as the markets were fairly quiet. The market has been struggling to gain, but has been relentless if nothing else. The action hasn’t been strong, but it has been somewhat convincing. The overall bias for the market is up in general, and the last decade has been nothing short of strong for the yellow metal.
The market continues to have a massive support area between the $1,500 and $1,540 levels, and it will take something special to break it down through that area in our opinion. The support will be based upon the long term trend, and the fact that it looks like several central banks could be easing as well. If this is in fact the case, the gold markets should see a significant bounce against all currencies, the Dollar included.
The $1,640 level above is the resistance area that the market needs to overcome to begin another leg up, and this is precisely what the bulls are aiming for. The recent action looks as if the market refuses to go down, even though it hasn’t seen a strong burst higher recently. The move that is building looks a lot like consolidation, and the fact that we are relatively close to the bottom of the bullish area, it makes sense to us that this could be a place where the bulls are starting to accumulate for the next leg higher.
The risk off trade is probably the only thing that is keeping this market down truth be known. With all of the uncertainty in the world, it has caused a rush into the Dollar, and the gold markets have suffered as a result. However, if the central banks out there are going to ease – there is a real chance that gold will be bought hand over fist. The market is a buy for us as long as we are above the $1,500 level, and we will do so on dips that show supportive candles. On a breakout above the $1,640 level – we are massively long.
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Originally posted here
