Gold Markets Bounce Hard

(July 3, 2023 - Christopher Lewis)

Gold markets initially plunged during the trading session on Monday, but then turned around to bounce hard as it looks like gold is trying to recover here.

Gold Market Technical Analysis

Gold markets have initially fallen during the trading session on Monday, but found enough support near the $1915 region to turn things around and rally. At this point, it looks like the 200-Day EMA continues to be an area of extreme importance, and therefore we need to look at it through the prism of trying to find a little bit of momentum. It’s worth also noting that the 200-Day EMA was backed up by the 61.8% Fibonacci level, an area that a lot of traders like.

This is not to say that gold cannot fall from here, just that there are a lot of things lining up at the same time to continue sending this market to the upside. With that being the case, I do think that it’s probably time to start buying gold, but I also recognize that Tuesday is Independence Day in the United States, and of course there will be a significant lack of liquidity. As long as we stay above the 200-Day EMA, I think this is probably going to continue to be a scenario where traders are trying to find value every time it pulls back a bit.

As far as the target is concerned, the $1950 level will be the initial target, and then perhaps the 50-Day EMA. Breaking above that then opens up the possibility of going to the $2000 level, an area that of course is a large, round, psychologically significant figure. Anything above there then opens up the possibility of retesting the recent highs that we had seen in this market.

On the other hand, if we were to break down below the 200-Day EMA, and perhaps even the $1900 level, then it opens up the possibility of a move down to the $1800 level, which is where we kicked off the most recent rally from to begin with. The $1800 level is likely to be very difficult to break down below, but it will make a juicy target if we break through the $1900 level. All things being equal, this is a scenario where we see plenty of value hunters return time and time again.