Gold Price Analysis – Gold Defends $4,000 Support Level Ahead of Holiday Weekend

Gold Technical Analysis

The gold market has rallied a bit during the early part of the trading session on Friday, as we continue to see a lot of questions about US dollar strength. That being said, it is a holiday and therefore liquidity and operating hours would be less than usual. Looks like Asian traders preferred gold, but that’s not a huge surprise. They tend to be some of the biggest bulls.

Support Levels and Key Market Drivers

The $4,000 level offering support is important as well. It’s a large, round, psychologically significant figure and an area where we’ve seen some action previously. If we were to break down below the $3,900 level, that would be an extraordinarily negative turn of events.

With this market being the way it is right now, it would not surprise me to see a little bit of follow-through, but I think we’re just trying to form some type of range. I’m not expecting to see the gold market just explode to the upside and go looking to the $4,600 level. Ultimately, expect choppiness and volatility, but I think this is a market that will continue to be noisy, will continue to be choppy.

But I think we’re still somewhat in a holding pattern as traders are trying to figure out what’s going on in the Middle East and, of course, what’s going on with the overall interest rate markets and whether or not the Federal Reserve is going to raise rates twice between now and the end of the year. The weak jobs numbers on Thursday certainly have given some fuel to the gold market, but I don’t know that we’ve changed anything. I think it’s just added more questions.

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