Gold Price Analysis – Gold Barely Hangs On as Death Cross Threatens Support

Gold Technical Analysis

The gold market has shown itself to be barely hanging on here during the Friday session. We did rally, but keep in mind that the market is continuing to see a lot of overhead resistance and selling pressure. This is a market that has been very ugly as of late.

The 50-day EMA has crossed below the 200-day EMA, kicking off the so-called death cross. That is a negative signal for longer-term traders who use moving averages. And of course, we also have to keep in mind that the dropping interest rates have provided a little bit of a boost for gold, but really, as long as there are concerns in the Middle East, it seems like traders are willing to hang on to paper, meaning bonds, to get that yield instead of a non-yielding asset like gold.

Death Cross Confirmed as Geopolitical Tensions Weigh on Bullion

The US dollar could be a bit of a problem here as well; the US dollar strengthening a lot of times will work against gold. But from the structural standpoint, we are still in consolidation. The $3,900 level below is an area that had been supported as well, so it’s possible there is support between $4,000 and $3,900.

Breaking below there, then the historical support can be found at $3,500. Short-term rallies are most certainly possible, but at this point in time, the market looks like it probably needs to convince a lot of traders; it needs to prove itself, and caution will more likely be a route that a lot of traders take as we head into a weekend that almost certainly will feature Middle East headlines again.

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