Gold markets have rallied significantly during the trading session on Monday as traders get back to work. The US dollar has been sold off a bit, so it does make sense that the gold markets would rally in that scenario. Ultimately, the market is trying to price and whether or not there will be more demand for gold. I do believe that ultimately this does happen, but you should keep in mind that it’s going to take a long time to get a lot of certainty when it comes to the markets.
The central banks around the world continue to do massive amounts of monetary policy and stimulus, so that should work against the value of fiat currencies. Because of this, that then makes the value of gold rise in general. Because of this, if we can get a daily close above the crucial $1700 level, it’s likely that the market will then start looking towards the next major figure, the $1750 level. It does look like we are getting ready to do that, but the daily close will be crucial, in order to keep from getting sucked into a “false break out.”
Pullbacks at this point should offer $1600 as support, perhaps even the $1500 level after that. The 200 day EMA is sitting at the $1500 level, so therefore I think it’s going to function as a bit of a “floor” in the market and perhaps even the overall uptrend. At this point, I believe that the decision to be made will be crucial but given enough time I do favor the upside in general so I’m not necessarily looking to sell, even if we do pull back.