Gold Price Analysis – Gold Continues to See Support on Dips

Gold Technical Analysis

The gold market has gapped lower to kick off the trading session on Friday, but it does look like it has got a little bit of support and buying pressure underneath. With this being the case, I think that you have to watch the $5,000 level very closely as the $5,000 level is a large round psychologically significant figure and an area that has proven itself to be important more than once.

With this being the case, I think this is a situation where the 50-day EMA sitting just below it opens up the possibility of support as well. All things being equal, this is a market that I think will continue to see a lot of interest because of all of the nonsense going on around the world at the moment and therefore really spooking most traders around the world from time to time.

Psychological Support and Global Volatility

Remember, we live in a very fast news cycle, so quite frankly, at any given moment, something could come into the psyche of the traders out there that gets them running for safety. The US dollar has been strengthening, and that, of course, is a way that gold does stay somewhat suppressed, but both can rise at the same time, and in fact they were earlier this year.

So, while I recognize the gold isn’t exactly explosive to the upside, there’s really no reason to short gold fundamentally or technically. I look at each pullback and slight bounce as a potential short-term buying opportunity in what I believe is a longer-term uptrend anyway. I have no interest in shorting this market.

If you’d like to know more about how commodity markets work, please visit our educational area.