How are the gold markets kicking off the week?

“Gold Market Technical Analysis
Gold has fallen rather hard during the trading session on Monday, after interest rates in the United States rallied quite significantly. This of course had people looking toward the US dollar, and that weighs upon the gold market. Quite frankly, I think this was a excuse more than anything else, as the market had rallied too far. The $2000 level obviously has a lot of psychology attached to it, so it’s not a huge surprise to see that area offer a significant amount of resistance. To simply sliced through $2000 easily probably would’ve been asking a lot, especially considering that the market had been quite parabolic previously.

However, this is not to say that the bullish attitude of the gold market is over, and it is likely that this step will be thought of as a potential buying opportunity, something that will be exacerbated if the US dollar starts to lose a significant amount of strength. On the other hand, there are plenty of other reasons to think that gold is going to continue to see a lot of buying pressure, due to potential wealth preservation, and of course uncertainty around the world.

Central banks have been buying gold hand over fist as well, so there is a little bit of a floor in the market regardless. The $1900 level would obviously be an area that a lot of people will be paying close attention to, as well as the 50-Day EMA indicator, which sits just below the $1900 level as well. The market has been a bit overextended, so we may have to work off some of that froth by either pulling back significantly or spending some time going back and forth.

If we can break out above the recent highs, then it’s likely that the market could go looking to the $2050 level, possibly even the $2100 level rather quickly. I have no interest in shorting this market anytime soon but I am also cognizant of the fact that the area we just tested is rather significant, therefore I think it probably takes some time to get back above it unless we see some type of fundamental reason for gold to suddenly explode to the upside.”