SPDR Gold Trust (GLD)

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Gold Markets Continue to Power Higher
By: Christopher Lewis | January 12, 2022

• Gold markets have initially gapped higher to kick off the future session on Wednesday, but then pulled back to fill that gap before turning around to rally yet again.

Gold markets have initially gapped higher during the trading session on Wednesday to reach much higher levels and show signs of strength, before pulling back to fill that gap. When we got to fill the gap, we turned around to show signs of life again and rallied rather significantly. Because of this, it looks like the market is hell-bent on going towards the $1830 level above, which of course is an area that has been important more than once. That is the top of the overall consolidation area that I see right now, and therefore I think it is worth paying close attention to it.

If we were to turn around a break above the top of that consolidation area, it would be a very strong sign that we are going to go much higher. At that point, I think that the gold market could very well find itself at the $1875 level given enough time. On the other hand, if we were to break down below the bottom of the candlestick for the trading session on Wednesday, that probably sends this market back down towards the $1800 level where we have the 50 day EMA as well as the 200 day EMA waiting.

Beyond that, the $1800 level of course is a psychologically important figure, and a lot of people will be paying close attention to it. With that in mind, I think this is a market that you need to pay close attention to, and you should probably pay close attention to the US dollar as well as the 10 year yields as they have an extreme negative correlation to this commodity.

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