Gold markets have rallied again during the trading session on Tuesday as we are now threatening the $1820 level. This is an area that seems to have quite a bit of resistance built into it, and if we can get above here it is likely the gold will really start to take off. At this point, I could see gold going to the $1850 level over the next several weeks. It is worth noting that gold has been building up quite a bit of pressure over the last couple of weeks, so this may not be as big of a surprise when you look back at things.
It is worth noting that the 50 day EMA and the 200 day EMA is sitting below and at basically the $1800 level, as well as the fact that they are completely flat. That has been the attitude of the market for quite some time, so now that we are finally seen a little bit of momentum, we may have a lot of chasing about to happen. The $1850 level is my first target, but after that I think we go to the $1875 level if we can keep the momentum up.
To the downside, I think those two moving averages will offer enough support that if we do not managed to break out significantly, we will probably only pull back in a somewhat shallow depth between now and the end of the year. With inflation fears stoking out there, it does make a certain amount of sense that people are starting to buy gold again, so I like the set up.
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This article was originally posted on FX Empire