Monday, Gold markets rallied a bit, as traders came back to work. This is a market that continues to find buyers on short-term dips and it also has a significant uptrend line that comes into play too.
I am seeing that buyers will buy dips as gold has more of a safety play attached to it, and there are lots of things to be worried about right now.
To the Northside, the 1600 mark has been a Key barrier, and therefore anticipate sellers there. But, if the daily candle can close above the 1600 psych mark it suggests that the market will continue going higher, perhaps reaching towards the 1800+ long term.
On the other hand, if the price was to break down below the uptrend line it would then find support at the 50-Day EMA.
But, there is little interest in trying to short gold now because there are too many reasons for participants to continue to see fear in the markets that could drive gold higher.
So, the market is very likely to continue to be a “buy on the dips” scenario going forward, do not fight the tape.
The coronavirus and a fear of slowing global growth will continue to be Key reasons why gold will find buyers.