Gold Technical Analysis
The gold market continues to hang around the 200-day EMA indicator that a lot of longer-term traders will be paying close attention to. It’s worth noting that the daily candlestick from the previous session on Monday was a hammer. If we can break above the 200-day EMA, it’s possible that we could get a nice little relief rally in gold, but I am not sure that we are going to see a massive move.
Technical Setup and Interest Rate Outlook
Interest rates drifting lower could open up the possibility of a move to a bigger level, perhaps the $4,600 level. Above there would also break above the 50-day EMA and we could go looking to the $5,000 level. If we were to break down, below the bottom of a hammer from Monday would be very negative—it could send gold down to the $4,200 level.
Ultimately, this will move on interest rates, so watch them. If they start to drop, that is actually good for gold. We have seen a little bit of that over the last 24 hours, but if the market were to see quite a bit of volatility in the bond markets, perhaps spiking higher, that really sends gold much lower.
I think at this point it all comes down to the Middle East. I think a lot of traders are exhausted, so we may settle in to hang around the 200-day EMA. I’m not looking for a big move, but it is at least a technical setup that could suggest a bounce is coming,
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