Gold markets only had a limited amount of off-hours trading in the futures markets on Good Friday, but there was a little bit of action in the CFD market. When you look at this chart, you can see that we had recently broken out above a significant barrier in the form of the $1970 level, showing signs that momentum is starting to pick up again. At this point, I think that the gold market is more likely than not to attempt a move toward $2000 above.
If we were to turn around and break down below the candlestick on Thursday, then it is likely that the market will go looking toward the $1950 level, possibly even lower than that. The 50-day EMA is at the $1921 level and rising. The 50-day EMA is a dynamic support level that could come into the picture, showing signs of stability. This is a market where I do like the idea of buying dips. The gold market is getting a nice boost due to the inflationary fears, not to mention the fact that there are a lot of fears when it comes to geopolitics at the moment.
If we can break above the $2000 level, we should be based on how quickly we got above and below it previously. Ultimately, I do think that it is only a matter of time before we get to the very top. That being said, if we were to break down below the 50-day EMA, then you have to take a serious look at the major support area that sits around the $1900 level. That extends down to the $1880 level, so breaking below there would open a trapdoor of the massive downward pressure.
In that scenario, one would have to assume that suddenly we had seen a major shift in risk appetite. Ultimately, this is a market that it is more likely to go higher than lower, due to the fact that the markets have so much to concern themselves with at the moment. Furthermore, the simple momentum is favoring that direction as well, and based upon the previous consolidation area, you can make an argument for a move to roughly $2040 or so. I suspect that is more likely than not going to be the outcome.