Gold markets drift lower during the Tuesday session

Gold markets fell during the trading session on Tuesday, as we continue to see a lot of US dollar strength. Because of this, it’s likely that the market will test the major support level just underneath at the $1300 level. · FX Empire

Christopher Lewis

Updated Tue, May 8, 2018, 9:52 PM

Gold markets continue to look at the $1300 level as being important, and I think we are likely to see some type of reaction in this area. Remember that the US dollar has been strengthening, so that has put bearish pressure on gold. It will be interesting to see what happens at the $1300 level but breaking down below there should send this market to the $1275 level. That is an area that is supportive as well, so will be interesting to see what happens there as well. I think eventually gold will rally, but this summer could be rather difficult for gold as the US dollar looks likely to be very strong.

Longer-term though, I think that it is a market that you should be buying, and not selling. Stay away from leverage, it is going to be the killer. I think that looking for a longer-term supportive candle, perhaps on the daily or even the weekly chart, for an opportunity to pick up value is probably what I will be doing. I’m not a huge fan of shorting gold, although I can certainly make an argument for it being a bit soft in the next few sessions.

I think we will continue to see a lot of noise in this market, and therefore safety will be the paramount concern for everybody involved. If we can break above the $1320 level, then I think the market can pick up the upward momentum. Until then, I need to see a longer-term candle to show signs of bottoming.