Gold Price Analysis – Gold Drops at the Open

Gold Technical Analysis

The gold market initially gapped lower to kick off the Monday session, but has since recovered quite a bit. The question now is whether or not we’ll get any follow-through, and honestly, I think we probably will eventually see the sellers come back into this market, but we could rally all the way to the 200-day EMA, which is at the $4,371 level pretty quickly, I would imagine.

Geopolitical Drivers and Technical Levels

The consolidation makes a certain amount of sense because we are seeing questions asked about the Middle East, and now it appears that the Iranians are at least accepting the idea of nuclear inspectors again, so that’s a move in the right direction, I suppose, for peace going forward.

But ultimately, this is a market that I think sold off pretty viciously and now is trying to find a range to trade in. A little bit of a recovery from here makes a certain amount of sense, but again, I look at the 200-day EMA as a major level that, quite frankly, if we can break above, gold can take off towards the $4,600 level. This is an area that I think will be difficult to break above without a major catalyst.

But right now, I don’t know if there’s enough out there to keep this market from just bouncing around in the general vicinity that we’ve seen over the last 2 weeks. Watch the interest rate markets in America; if they start to fall, that should help gold, although that correlation broke down recently as well, so be aware of that possibility of continuation.

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