Gold Price Analysis – Gold Attempting to Bounce from $4000 Region

Gold Technical Analysis

The gold market started to drift a little bit to the $4,000 level, only to turn around and show signs of strength again. Ultimately, gold is a little oversold, and a bit of a reversion to the mean would make some sense, and it’s also worth noting that the $4,000 level, of course, is a large psychologically significant figure.

The $4,200 level above, I think, would be a bit of a resistance barrier, and we’ll have to wait and see whether or not we get some type of exhaustion in that area. If we were to break down below the $4,000 level, then we could take a look at $3,900 underneath, and below that, then we are looking at a potential drop all the way down to the $3,500 level.

Technical Support Levels and Asset Correlations

Interest rates are drifting a little bit lower; in theory, that should help gold, but that hasn’t been the game that we’ve been playing as of late. Maybe we can go back to that. We are seeing that correlation play out today on Friday, but there have been several days where gold was falling right along with the rates, so the correlation is still somewhat in flux at the moment.

The US dollar remains strong, so we’ll have to wait and see how that plays out, but at least in the short term, it looks like the oversold condition is being corrected, and gold will bounce for a short move. I wouldn’t read too much into this, at least not yet. We don’t have any momentum.

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