Gold markets have fallen a bit against the backdrop of a parabolic move during the trading session on Friday. Yes, we had a lot of devastation on Wednesday, but we are still far overdone at this point, and I think at this juncture it comes down to the US dollar. After all, there is a lot of fear out there when it comes to war, and while gold is one way to play that fear, sooner or later people start looking for the US dollar again. I do think we are about to see that, but I am not necessarily calling for a meltdown in this market either.
Gold Price Predictions Video 14.03.22
The biggest problem you are going to have trading this market is that it is being driven by headlines that can change at the drop of a hat, especially with the war in Ukraine. Furthermore, you also need to keep in mind that interest rate differential will be an issue, so if interest rates continue to spike in America, that could very well put downward pressure on gold. Think of it this way: would you rather pay to house quite a bit of gold, or would you rather own a piece of paper and collect interest? That is the question that large funds have to ask themselves every day.
Regardless, I do not necessarily think that we are going to break down rapidly, and I also believe that the $1920 level should be a bit supportive. Breaking down below that level would obviously be very bearish, but we are a long way from doing that, and in fact, are $51 above there as I record this video. On the upside, if we break back above the $2000 level that would obviously be very bullish, and then I think we would go looking towards the recent highs.
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This article was originally posted on FX Empire
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