Gold markets have drifted lower during the trading session on Tuesday, losing about 0.5% as I record this video, testing the $1255 level. I believe there’s even more stringent support closer to the $1250 level, and it’s likely that we could drift down to that area and unless we get more of a “risk on” attitude. Either way, we have broken down below a major uptrend line recently, that I have left on the chart for you to see. By doing so, that is a very negative turn of events for gold, and I think it could weigh upon this market going forward.
Keep in mind that Gold markets are highly influenced by what goes on with the US dollar, so pay attention to the US Dollar Index, or even just the EUR/USD pair. If the dollar strengthens, that could apply even more bearish pressure on this market. Overall, I believe that the markets will eventually recover here, but I think it may take some time to get to that point. In the meantime, I do like go longer-term, but I would only by physical gold if I was looking to go long. Short-term sellers can get involved in the CFD or futures markets, but keep in mind that you will probably need to see some type of rally that show signs of exhaustion on the short-term charts to get involved. If you are looking to trade this market, at this point it’s a short-term “sell the rallies” type of attitude you are dealing with.