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The 50-Day Exponential Moving Average (EMA) is currently closed to the $1860 level, and this should be considered a significant support level.
If the US dollar gains strength, especially due to the inflow of funds into the bond market, a pullback in gold is even more likely. However, the $1900 level underneath should provide some support, given its past role as both support and resistance. Additionally, gold may be experiencing an uptick in demand due to concerns about the banking system, as well as the expected bailouts that may lead to currency depreciation.
The 50-Day Exponential Moving Average (EMA) is currently closed to the $1860 level, and this should be considered a significant support level. Any pullback that approaches this area should be viewed as a potential buying opportunity unless there is a sudden surge in bonds and the US dollar. On the other hand, the $1950 level is likely to act as a significant resistance barrier. If the market can break through this level, it may test the recent highs once again. Breaking through $2000 would be a major milestone for gold.
Gold Remains Attractive
Despite its recent volatility, gold remains attractive as a haven investment. It has been consistent in this regard over the past few months, even with the significant pullback in February. Buying on dips may be the best approach for this market. More likely than not, there will be a lot of traders out there looking to get involved, especially as there are so many issues around the world from a financial standpoint that gold will become even more attractive as there are concerns about a credit crisis.
Ultimately, the gold market is experiencing a lot of noise and indecision. A pullback is likely soon, especially if the US dollar gains strength. However, the $1900 level should provide some support, and the $1860 level should be considered a major support level. Buying on dips may be the best approach, as gold remains an attractive haven investment. As always, it is important to proceed with caution and have a long-term investment strategy in place.
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Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.
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